Nifty set to extend uptrend, banks to lead rally: Balanco
MUMBAI: Benchmark index Nifty is set to extend its uptrend going ahead with banks likely to lead the breakout on the index, said CLSA’s global technical analyst Laurence Balanco, in a note.
“The Nifty has traced out an impressive long-term uptrend with the index set to extend its trend as price action tests overhead resistance provided by the March/September 2015 all-time highs at the 8994-9191area,” said Balanco.
Balanco said that a break above this resistance zone would extend the bullish uptrend channel which would open the door for a rise to the target levels between 10350 and 12000.
This week, the Indian benchmark indices retreated after hitting 52-week highs. On the Nifty, the 9000-mark remained elusive as the index came off Thursday’s session high of 8992.50 to end the week 0.5% lower at 8897.55.
Balanco said that many global markets including India have shown powerful trends in recent times supported by breadth and momentum indicators, and as such, any short-term pull back in these markets are likely to be followed by further gains.
In the banking space, Balanco recommends buying shares of Housing Development Finance Corp and Axis Bank.
On HDFC, Balanco said he expects the stock, which has been consolidating in a range of around Rs 440 since early 2015, to breakout above Rs 1,400-Rs 1,453 zone. This would support an initial upside target of Rs 1,835, said Balanco.
Balanco is also bullish on Axis Bank as the stock has broken out of a four-month-old downtrend channel. The stock may test Rs 640-Rs 655 level if it rises above the initial target of Rs 555, said Balanco.
Axis Bank ended up 1.4% atRs 513.60 and HDFC ended down 2% at Rs 1,370.50 on Friday.
If the stock breaks even the Rs 640-Rs 655 barrier, would support an ultimate upside target of Rs 1,070-Rs 1,080, he said.
Balanco also pointed out that the Nifty IT index is starting to stabilise after a downtrend of two years, and views HCL Technologies as the most attractive bet within the sector.
Balanco said that a breakout above the resistance zone of Rs 865 to Rs 869 on HCL Technologies would support an upside target of Rs 1,064-Rs 1,065. The stock ended up 0.8% at Rs 850.40 on Friday.
“The Nifty has traced out an impressive long-term uptrend with the index set to extend its trend as price action tests overhead resistance provided by the March/September 2015 all-time highs at the 8994-9191area,” said Balanco.
Balanco said that a break above this resistance zone would extend the bullish uptrend channel which would open the door for a rise to the target levels between 10350 and 12000.
This week, the Indian benchmark indices retreated after hitting 52-week highs. On the Nifty, the 9000-mark remained elusive as the index came off Thursday’s session high of 8992.50 to end the week 0.5% lower at 8897.55.
Balanco said that many global markets including India have shown powerful trends in recent times supported by breadth and momentum indicators, and as such, any short-term pull back in these markets are likely to be followed by further gains.
In the banking space, Balanco recommends buying shares of Housing Development Finance Corp and Axis Bank.
On HDFC, Balanco said he expects the stock, which has been consolidating in a range of around Rs 440 since early 2015, to breakout above Rs 1,400-Rs 1,453 zone. This would support an initial upside target of Rs 1,835, said Balanco.
Balanco is also bullish on Axis Bank as the stock has broken out of a four-month-old downtrend channel. The stock may test Rs 640-Rs 655 level if it rises above the initial target of Rs 555, said Balanco.
Axis Bank ended up 1.4% atRs 513.60 and HDFC ended down 2% at Rs 1,370.50 on Friday.
If the stock breaks even the Rs 640-Rs 655 barrier, would support an ultimate upside target of Rs 1,070-Rs 1,080, he said.
Balanco also pointed out that the Nifty IT index is starting to stabilise after a downtrend of two years, and views HCL Technologies as the most attractive bet within the sector.
Balanco said that a breakout above the resistance zone of Rs 865 to Rs 869 on HCL Technologies would support an upside target of Rs 1,064-Rs 1,065. The stock ended up 0.8% at Rs 850.40 on Friday.
