Private Banks' Bullish Run To Continue, Say Analysts
Aditya Gaggar of Progressive Share Brokers believes the Nifty will provide clear direction if it stops oscillating and breaks out on either side.
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Analysts are bullish on the banking and financial sector and advise investors to maintain their long position on stocks.
Most of the private banks are performing well, according to Rajesh Palviya, senior vice-president of technical and derivatives research at Axis Securities Ltd.
Palviya said that the bullish run by the private banks may continue further due to the breakout witnessed on the short-term charts of the banks. Nifty Bank can experience another round of rally, provided it maintains its 51,500-mark, he said. “It can extend its gains towards the 52,400–52,500 mark in continuation of this upmove.”
After looking at the bullish move of banks like HDFC Bank Ltd., Kotak Mahindra Bank Ltd., ICICI Bank Ltd. and Axis Bank Ltd., he expects a further 3–4% uptick in their performance. As compared with public sector undertakings, it is the private banks that have contributed to the ongoing bank rally, he said. “For the banking sector, we will hold our positions with a stop loss of 51,400.”
Palviya has buy recommendations for three stocks—Bandhan Bank Ltd., with a stop loss of Rs 204 and target of Rs 224; Deepak Nitrite Ltd., with a target of Rs 2,740 and a stop loss of Rs 2,575; and for Vedanta Ltd., with a target of Rs 485 and a stop loss of Rs 460.
G. Chokkalingam, founder and managing director of Equinomics Research Pvt., has a bearish approach to the metal sector. Though metal prices have improved in the last two months, globally it has witnessed a periodical correction. He recommends Hindalco Industries Ltd. over Vedanta, citing balance sheet issues of its subsidiary companies.
Chokkalingam is skeptical about the fertiliser stocks due to the 18% deficit predicted in the monsoon for the present year by the Indian Meteorological Department. “I would wait for two months before jumping on fertiliser stocks.” Sector-wise, he is bullish on the banking segment where his top pick is Kotak Mahindra Bank Ltd.
On Thursday, the Nifty ended 51 points, or 0.22%, up at 23,567, while the Sensex closed 141.34 points, or 0.18%, higher at 77,478.93.
"With a spinning-top candlestick pattern, nothing has changed for the Nifty 50. The lower side is protected at 23,340, while 23,660 will be considered resistance," Aditya Gaggar, director of Progressive Share Brokers, said. "For the past couple of days, the index has been oscillating in a range. A breakout on either side will provide a clear direction."
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