Since the index is already up for 12-13 trading sessions, one should wait for some price and time correction to take place to initiate fresh long positions, Arun Kumar, Market Strategist, Reliance Securities, said in an interview with Moneycontrol’s Kshitij Anand.
Q) What is fuelling a rally in Nifty Bank and near-term target? Any stocks particularly in that index which are still looking attractive after recent rally?
A) The sharp breakout of NiftyBank index seen on March 5, 2019, triggered bullish signals on a near-term basis. On March 7, the Bank index surpassed its high of 27,754 recorded on January 9, 2019, on a closing basis.
This move confirmed the breakout and attracted long-term participation. Stocks, especially Axis Bank and ICICI Bank, improved the bullish sentiments with their sharp rallies.
Since the index is already up for 12-13 trading sessions, one should wait for some price and time correction to take place to initiate fresh long positions.
HDFC Bank, ICICI Bank, SBI and Axis Bank may be considered for going long, post the corrective action.
Q) Mid and small-cap stocks which have been hitting 52-week highs on consistently. Are they still worth looking at?
A) The NSE Midcap Index has consolidated around its long-term average for the past eight trading sessions and the index has moved up significantly after testing its 200-week moving average over the past five weeks.
Whereas, NSE Small-cap Index has been hovering just below its 200-DMA for the past nine trading sessions. It trades just below its 200-week moving average.
From a relative strength perspective (RSI), NSE Small-cap index displays better strength. Considering the behaviour of these indices against the benchmark, one must be very selective and trade in qualitative stocks.
Q) How is Nifty looking on charts ahead of the March F&O expiry?
A) The NSE Nifty50 Index is stretched on the near-term basis and may consolidate ahead of the expiry. Since the index is positive on a medium-term basis, we expect any corrective action to be limited. Ideally, it should hold above 11,250 on closing basis during next week to maintain its positive momentum.
Q) How are Airline stocks such as IndiGo, SpiceJet, and Jet Airways looking on charts?
A) IndiGo continues to rule the roost as the leader in this pack. It is the outperformer. The stock has scope to retain its leadership on a medium-term basis.
SpiceJet comes in as the second-best stock to trade and based on the setups it could generate positive returns on a medium-term basis.
However, Jet Airways has underperformed and there are no immediate signs of reversing this trend.
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