Gold is likely to touch levels of $1,700/ounce in 2020 and is a buy even at the current levels if investors consider it from a long-term perspective, Umesh Mehta, Head of Research, Samco Securities tells Moneycontrol’s Kshitij Anand.
Q. The Nifty50 saw a smart rally in the week gone by which pushed the index back above 12,100 levels in a single trading session. What is your outlook on markets – do you think, the momentum will continue as the risk stemming from coronavirus (COVID-19) seems to be receding? What are the important levels to track in the coming week?
A. The momentum is expected to fizzle out in the coming week and higher side profit bookings are likely to emerge. There will be more buyers who are waiting to enter around 11,900 levels.
The Nifty50 is now constrained within a range of 11,900-12,250 and the break from either side is likely to decide the trend going forward.
Q. US President Donald Trump's visit to India which is scheduled next week is already fuelling some volatility in defence-related stocks. Media reports suggest that India and the US are expected to sign a $2.6 billion deal to buy 24 Seahawk helicopters from American defence manufacturer Lockheed Martin Corp. Will defence-related stocks will be back in focus?
A. Donald Trump’s visit to India will definitely have a ripple effect on defence, engineering and auto stocks especially two-wheelers. But, such an instance will only create trading opportunities.
Hence, investors should stay away from this volatility and avoid such high volatility stocks.
Q. India Gold April futures hit a fresh record high in the week gone by. What are your targets for the yellow metal for 2020? And, what should new investors do now – wait for a dip or can opt for buying at current levels? From a portfolio perspective – what percentage should you keep in your overall portfolio?
A. Gold is likely to touch levels of $1,700/ounce in 2020 and is a buy even at the current levels if investors consider it from a long-term perspective.
From an overall portfolio perspective, an investor can allocate 15 percent of their total corpus in gold.
Q. Which are the top three to five stocks you think are good breakout buys at current levels and why?
A. From a weekly chart, Ajanta Pharma would be a good bet as it recently made a 52-week breakout and thereafter corrected. It is currently at good levels to accumulate the stock. From a daily chart perspective, Akzo Nobel India, Alkyl Amines Chemicals and Alembic Pharma would be good picks.
Alembic Pharma made a two-year high breakout with good volumes. It is therefore expected to rally further. Akzo Nobel and Alkyl Amines are currently trading above their 50-DMA and with the current momentum, they will likely move up further.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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