Positive start to Samvat 2079; We see Nifty50 hitting 18K in the next fortnight or so: Anand James

"All sectors except for financial services pulled back significantly suggesting a volatile week, but we are very encouraged to look for 18,000 in the next fortnight or so," says Anand James, Chief Market Strategist at Geojit Financial Services.

In an interview with ETMarkets, James, said: “USDINR’s chart has kept it shape, despite pulling back sharply after pushing beyond 83. This suggests that though a bit of momentum has been lost, the path towards 83.3 – 84.4 is not lost” Edited excerpts:

What a week for Indian markets ahead of Diwali. Benchmark indices rose more than 2% in the week gone by. What led to the price action?
In the previous week, we saw a dip below the 200-DMA, and a quick recovery above the same emboldened the investors to chase prices higher in the run up to Diwali.

The sharp decline in VIX was also very instrumental in signalling that investors were comfortable even as prices rose, in stark contrast to the previous week, very almost all every attempt to rise was spectacularly beaten down.

More importantly, banks led the charge from the start itself, with good earnings helping indices to retain gains in the back end of the week.

We are in a truncated week. Do you Nifty50 hitting 17800 in October?
A start-stop week spoils a linear trajectory for the bulls. Friday’s closing also was dull, with almost all sectors except for financial services pulling back significantly suggesting a volatile week ahead.

Yet, we are very encouraged to look for 18000 in the next fortnight or so.

In terms of sectors, banks, PSU stocks rose more than 3%. What led to the price action?
A low base, after the selloff in September gave a good launchpad for buying ahead of the earnings season, with the expectation of improvement in balance sheets and credit growth.

What are your top trading ideas for Samvat 2079 for the next 3-4 weeks?
Here is a list of recommendations for the short term:

Sterlite Technologies: Buy| Target Rs 170-175| Stop Loss Rs 158| LTP Rs 167
A consolidation and reversal candlesticks formed in the daily time frame after a weeklong decline is offering buying opportunity.

Moreover, MACD forest is showing exhaustion which is prompting us to look for a reversal in the stock. We expect the stock to move towards 170 to 175 in the near term. Protect longs with a stop loss placed below 158.

Coromandel International: Buy| Target Rs 1020-1060| Stop Loss Rs 968
The stock has been moving within a wedge pattern and is close to breaching the upper trendline resistance. Moreover, MACD has broken above the signal line along with PSAR breakout on daily charts favoring more upside for the stock.

We expect the stock to move towards the 1020 to 1060 levels. Place stop loss below 968 to protect downsides.

Heidelbergcement India: Buy| Target Rs 196| Stop Loss Rs 180
The stock formed an inverted hammer candlestick on daily charts is pointing towards a short-term reversal backed by exhaustion in the MACD forest.

We expect this stock to move towards 196 in the near term. Protect longs with a stop loss placed below 180.

What is your take on the rupee? Do you see further weakness in the coming week?
USDINR’s chart has kept it shape, despite pulling back sharply after pushing beyond 83. This suggests that though a bit of momentum has been lost, the path towards 83.3 – 84.4 is not lost.

One trading advice you would want to give to traders on Muhurat Trading for Samvat 2079.
A truncated week, with monthly expiry, also falling in, is a recipe for volatility. But this may not lead to large trading ranges, given the sustained fall in VIX in the last week.

Traders would do well to apportion a part of their winnings into a long-term investment on this auspicious accession.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)