Nifty may hit 18,900, some large names can gain 5-7%: Analysts

The Nifty is heading towards 18,900 levels in the near term with traders building bullish bets on the market, say technical analysts. Traders should, however, adopt a stock specific approach and look to add quality stocks such as Reliance Industries, HDFC Bank, L&T, Tata Motors, ACC and HCL Tech for a 5-7% upside in the short term, they said.

SUDEEP SHAH
HEAD - TECHNICAL & DERIVATIVE RESEARCH DESK, SBI SECURITIES

Where is the Nifty headed this week?
The volatility index, India VIX, has slipped to 13.4 indicating choppiness is gradually subsiding and thus providing comfort to the bulls. Chart patterns suggest the 13-exponential moving average zone of 18,200-18,250 will be a strong support. Until the index sustains above 18,200, we may witness continuation of the rally up to 18,750-18,800, and the trend remains to ‘buy on dips’. However, if the index slips below 18,200, weakness could persist up to 17,950-17,980. Options data suggest a broader trading range of 18,200-18,780 for this week.

What should Investors do?
Traders and investors should adopt a stockspecific approach and look to add quality stocks that are currently outperforming the markets. One should prefer large-caps and mid-caps while avoiding small-caps, especially the debt-ridden ones. Based on the rollover analysis and chart setups, we expect stocks from the banking, IT, oil & gas, and metal sectors to outperform with positive trade set-ups visible in select largecap names such as HDFC Bank, Tata Motors, ACC, Reliance, HCL Tech & Infosys. On the mid-cap front, stocks like Aditya Birla Capital, JSW Steel, Dalmia Bharat, Cummins, Apollo Tyres, UPL, and Tata Power could continue to witness strong buying interest

ARPAN SHAH
TECHNICAL ANALYST, MONARCH NETWORTH CAPITAL

Where is the Nifty headed?
The index has reached its all-time high level, and it is consolidating near this level. Historically, December has given positive returns over the years, so traders can expect the upside momentum to continue in the coming weeks. The index is heading for the 18,800-19,000 level in the coming weeks, while it has strong support at 18,300 level. Bank Nifty is trading at an all-time high level, and PSU banks have participated strongly in this upside momentum. Going forward, PSU banking stocks will likely trade range-bound post this sharp run-up while the heavyweight HDFC Band can witness upside momentum.

What should investors do?
The IT index has given a fresh breakout from the consolidation range of 26,200-30,200 level, and the first upside target for this breakout is placed at 34,200 level. Any dip in IT stocks is a strong buying opportunity. Infosys, Persistent, and Saksort are the top picks from large-, mid-, and small-caps. ACC, from the cement sector, has started fresh upside momentum, heading for 2,700-2,800 levels in the coming days. From the realty sector, DLF has been facing a strong supply zone near the 410 level since the last few weeks, and once it takes out this level, it can head to the 520 level in the coming months.

DHARMESH SHAH
TECHNICAL ANALYST, ICICI SECURITIES

Where is the index headed this week?
We reiterate our positive stance of Nifty challenging an all-time high and gradually heading towards 18,900 in the coming month. Nifty makes higher high-lows after breaking out from a one-year trading range. India VIX corrected another 10% in the week, continuing its downward trend and highlighting low-risk perception amongst market participants. The dollar index continued a lower high-low pattern after the breakdown from the multi-month rising channel, indicating a positive reversal for equities. Hence, the ‘buy on dips’ strategy should be adopted as we do not expect the index to breach the key support of 18,100.

What should investors do?
We expect midcaps to outperform relatively in the coming month and witness catch-up activity as it approaches the maturity of price and time-wise correction. Thus, a temporary breather should be capitalised to accumulate quality midcaps. On stock front, Reliance Industries, HDFC Bank, Larsen & Toubro, Tata Motors and HCL Tech looks good for 5-7% upside; while in midcap, City Union Bank, RailTel, Coforge, Container Corporation, JK Lakshmi Cement, Cummins India look good for 8-10% upside. Sectorally, BFSI, IT, telecom, PSU, and infrastructure are preferred sectors