As long as Nifty is trading above the channel support placed at 10,850 to 10,800 levels, a recovery towards 11,800 is possible, Umesh Mehta has said in an interview with Moneycontrol.
As long as Nifty is trading above the channel support placed at 10,850 to 10,800 levels, a recovery towards 11,800 is possible, Umesh Mehta, Head of Research, Samco Securities, said in an interview with Moneycontrol’s Kshitij Anand.
However, Mehta added that this recovery might take time as the sentiments are negative everywhere and a phase of weakness and consolidation may be witnessed.
Q. The Nifty is down over 6 percent so far in the week trading below crucial support levels of 11,300 levels. Stock market investors lost Rs 10 lakh crore in six trading sessions. What is the way ahead for Indian markets?
A. We have a positive outlook for the intermediate-to-long-term as long as Nifty is trading within the upward sloping rising channel. Looking at the current scenario, investors should look to buy selective quality stocks in a staggered manner.
A SIP format in stocks will be helpful in accumulating strong stocks in this volatile environment. Selling and burning your hands when a market is falling will turn out to be loss-making. Hence, investors should patiently follow the above strategy until the virus outbreak subsides.
Q. Nifty fell over 3 percent in the February series. What is the outlook for March series? Do you think Nifty50 will breach 11,000 or will it recover back towards 11,800-12,000 levels?
A. The outlook for the March series is broadly hinting towards a bearish to consolidation view. Going ahead, markets are likely to react in sync with global bourses.
As long as Nifty is trading above the channel support placed at 10,850 to 10,800 levels, a recovery towards 11,800 is possible, but it might take time as the sentiments are negative everywhere and we might witness a phase of weakness and consolidation.
Q. Where do you see rupee heading in March? Do you see more depreciation?
A. USD-INR is coming out of a six-month period of consolidation and it made a breakout towards the upside. The Indian Rupee is likely to depreciate going ahead. In periods of volatility and negative outlook investors move towards safer haven assets and developed markets which leads to the outflow of money.
Q. What is the strategy which one could deploy for the coming week?
A. In the coming week, traders should continue to stay away at least till the volatility in the market subsides. As the VIX is towards its higher range, any bet can turn out to be extremely risky.
Q) Any top three-five breakout buys which you think could be bought for March series?
A. Shriram Transport Finance, Balkrishna Industries and Ajanta Pharma have recently come out of their two to three years of underperformance and the recent price movement suggests that these stocks have might still move higher.
AIA Engineering is in a major uptrend and has given a breakout after almost two years of consolidation. Escorts has recently made an intermediate trend reversal and seems to be continuing its major uptrend.
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