Analysts Bullish On Bank Nifty Amid Tight Stop-Loss

Analysts said the 50,200 mark is crucial for the Bank Nifty at a time when the index faces volatility.

“As long as 50,100, 50,200 is held, you should consider a long position on Bank Nifty, there is a very tight stop-loss,” Kush Bohra, founder of the investment platform Kushbhora.com, said.

Despite HDFC Bank Ltd. and State Bank of India dragging the index, he still sees support.

“Even if they stem the fall, the likes of ICICI Bank Ltd. and Axis Bank Ltd. will perhaps jump in, and you could see some sort of an up-move closer to 53,300 or even 53,800 levels,” he told NDTV Profit. 

The NSE Nifty 50 settled 0.46% higher at 24,433.20, and the S&P BSE Sensex rose 0.49% to 80,351.64. Intraday, Nifty rose 0.51% to a fresh high of 24,443.60, while the Sensex gained 0.55% to 80,397.17.

He said the Nifty has seen incremental gains and that if he has an existing position, he’d continue to “ride it”. “The next level to watch for on Nifty is 24,650 and the stop-loss comes in at 24,200.”

Analysts said liquidity is the primary market driver, with valuations high across sectors.

“There are no sellers in the market, the demand is far too high in comparison to the supply of the free-flow shares,” Dharmesh Kant, head of equity research at Chola Securites, said.

Kant said current valuations of market assets are one standard deviation above the average. In addition, he said companies are enjoying high valuation even amid weak revenue growth.

“As long as liquidities are coming in, there's no stoppage,” Kant said. “We’re stepping into a scary zone now, on the back of the liquidity flows driving the market up.”

Irrespective of size, all markets will feel the effects of the coming “headwinds”, he said.

The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.