DAILY VOICE | 12,200 is a make or break level in the coming week for Nifty50: Gaurav Garg

Even if the momentum continues it would not be a cakewalk for the Nifty to touch record highs, as the immediate resistance is placed at 12,300 and the support is at 12,100, Gaurav Garg, Head of Research, CapitalVia Global Research Limited said in an interview with Moneycontrol’s Kshitij Anand.

edited excerpts:

Q) The Nifty50 has been on a joy ride in the week as bulls managed to push the index above 12,000 levels. The index has already rallied more than 4% so what led to the price action?

A) The opening week of November was rampage by bulls as the Nifty50 crossed the 12,000 mark with ease, the level which it could not breach in the past months.

The main reason leading to the price action was the recovery in the global markets mostly driven by the expectation of the US election. Furthermore, the positive earnings results in HDFC Ltd, as well as ICICI Bank, also fueled the rise in the Nifty50.

Q) Do you think if the momentum continues we could well hit record highs by Diwali or on the Diwali day itself? What does the data suggest?

A) Even if the momentum continues it would not be a cakewalk for the Nifty to touch record highs, as the immediate resistance is placed at 12,300 and the support is at 12,100.

The level of 12,200 is a make or break level with a nearly equal amount of call and put writing. However, the trend seems to be positive although a healthy correction could be expected.

Q) Which are the important levels that investors should track in the coming week or in the run-up to Diwali?

A) The Nifty closed above its psychological level of the 12,000 mark, which is an important level to look for next week.

For the coming week, the Nifty might touch its all-time high of 12,430.50 led by private banks and technology stocks. India VIX closed near 20, shows that bulls might continue to hold the grip. However, investors should chase quality stock in the coming week.

Q) On the broader markets front, both Small & Midcap underperformed benchmark indices in the week gone by. Looks like investors are staying with large-cap names in the run-up to US elections as well as Diwali? What are your views?

A) In my opinion, Largecaps might continue to outperform broader indices. Investors are likely to stay with largecap amidst a volatile week.

Strong earnings in Q2FY21 along with firm global cues might continue to push Nifty to a higher level in the coming week. However, a rally might catch-up in broader indices too, which might trigger buying momentum in mid and small caps. But, largecap might provide a cushion over broader indices.

Q) Any 3-5 trading ideas for the next 3-4 weeks?

A) Here is a list of top trading ideas for the next 3-4 weeks:

Tata Consultancy Services Limited: Buy | Trigger Price: Rs 2720 | Target: Rs 2860 | Stop Loss: Rs 2665 | Upside: 5%

The stock has witnessed a reversal from its support level. The stock could gain further strength if it sustains above Rs 2720.

The crossover of its short and medium-term averages on the daily charts with strong volumes showing signs of further upside.

Coforge Limited: Buy | Trigger Price: Rs 2230 | Target: Rs 2380 | Stop Loss: Rs 2140 | Upside: 4.73 %

Dabur: Buy | Trigger Price: Rs 530 | Target: Rs 565 | Stop Loss: Rs 505 | Upside: 6.60%

The stock is forming a bullish flag pattern, if the stock somehow sustains above Rs 530 might lead the stock to positive momentum. The stock has seen a significant addition of volumes in recent days. Risk and reward is favorable at this juncture of time.