Focus on quality with sustained growth

Nifty makes a new all-time high of 18,041.95 and also on a closing basis at 17,945.95. This renewed momentum was on the back of broader sector buying led by Auto, PSE, Realty and Metal. Most sectors gained more than a percentage while the IT space was the sector which was down more than 3 per cent due to TCS numbers.

The momentum is broadly in favour of bulls when we look at a higher time frame and BankNifty on a closing basis at all-time highs also added the fuel. This is a secular bullish trend and any correction at lower levels of 17,450 – 17,670 are good but the caveat is of stock selection and approach towards sectors where money is flowing into. We have been bullish on two spaces in the short term which are CNX Auto which is coming out of long consolidation and PSE space which is seeing continuous traction in the last few weeks.

We also want to draw attention to one more space that looks ripe for the long term. As the momentum gets stronger, every other stock would make a new all-time high but the focus should be on quality along with sustained growth in numbers. Midcap and Small-cap should also be part of the portfolio given they add more to alpha but one has to be stock specific in approach.

The range which was previously seen at 17,400 – 17,800 is now shifting to 17,800 – 18,200. BankNifty is also shifting its range on the higher side with support now shifting towards 37,700 – 37,600 while on the higher side base on OI we see upside resistance at 38,500 – 38,700. We suggest buying on dips towards the lower levels mentioned above.

(The author is Technical Analyst, Finversify)