See value in auto, banking sectors; 2 top trading picks in this market: Aamar Deo Singh
Angel One's Aamar Deo Singh suggests that despite geopolitical tensions, Indian markets show resilience. He highlights IDFC First Bank and Marico as potential trading opportunities, with specific targets and stop losses. Singh notes that auto anci...
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ETMarkets.com
Aamar Deo Singh, Senior Vice President - Equity, Commodity & Currency, Angel One, says IDFC First Bank, having rebounded from Rs 52-53 levels, is poised for further gains, breaching the Rs 65-66 resistance zone, targeting Rs 77 with a stop loss at Rs 63. Marico from FMCG space is showing buying opportunity for an upside target of Rs 783 with a stop loss below Rs 700.
The Indian markets are showing a bit of resilience amidst all the volatility. What are the data points you are tracking for the benchmark indices?
Aamar Deo Singh: Despite the flare up in tensions between India and Pakistan, markets have been holding up quite firmly and as you rightly said, the overall breadth of the market has been positive. That again is a positive thing which we have seen across the multi-caps – be it the largecaps, smallcaps and midcaps and also across sectors. That is definitely a positive welcome. Apart from that, what we have seen is that the India VIX is also cooling off. So, these are definitely positive triggers.
As far as our markets are concerned, I would say that the upside in Nifty is definitely running into a wall of resistance, somewhere around 24,400, 24,600. So this 200-point on the upside is acting as a zone of resistance because we should understand that we have seen almost a 10% rally in Nifty over the last few weeks. So that has been very sharp, from almost 22,000 levels we have seen it to rally 24,400, so there has to be a breather.
Secondly, if we look at the macro side from a medium-term perspective, we are seeing that still the earnings are not as per expectations. The GDP growth would take time. There are concerns with regard to the tariffs and all that, so that is where the markets are.
Right now, as far as trading ideas are concerned, one stock to look at is IDFC First Bank from the banking space. So, this is one stock which has bounced back from almost 52, 53 levels, currently it is around 68 odd levels.
Technically, the stock is poised for trading higher because it has breached the 65, 66 zone of resistance. So, this is one stock one can look at from a trading perspective for an upside target of Rs 77 with a stop loss of Rs 63. Also, if I look at the fundamental factors, there also we have seen some strong capital infusion in the bank from reputed investors like Warburg Pincus and Abu Dhabi investments. So, that also bodes well for this stock.
The second stock I would like to talk about is Marico from FMCG space. So, this is one stock one can look at. If I look at the stock, the stock has bounced back significantly, trading slightly around the Rs 725-726 levels. Any pullback in the stock is a buying opportunity for an upside target of Rs 783 and a stop loss below Rs 700 levels.
What are the pockets where you see value? There are some pockets that are doing very well even if the rest of the market is managing to hold on right now. There are some pockets that are doing pretty well. What are these pockets to watch out for?
Aamar Deo Singh: Auto ancillary and auto stocks have started performing, that is one. Secondly, if we look at the banking space, private sector and small banks and NBFCs have witnessed some sharp up move and also some stocks in the FMCG space have started moving up. These are a few sectors which are doing well and are expected to do well in coming weeks.
Give us some sense of how you are looking at India VIX because that is knocking the doors of 19 odd marks and whenever we have seen such elevated levels, it is not good for the markets. Do you think there is a possibility for that to spike up even more?
Aamar Deo Singh: I would say that is a really tough question and that would depend more on how Pakistan really takes this forward. But as you rightly said, markets are more comfortable in the 14 to 16 range for the VIX, anything above that clearly shows that there are some concerns in the minds of the investors. That is being reflected as well.
As far as India VIX is concerned, the recent high which it had made was almost 22 levels. That is one level to watch out for because from there, it has corrected. One definitely needs to be slightly cautious at least for the next couple of weeks because if there is some action or some reaction from the other side, that may take some time. So, one needs to be slightly cautious at the current levels, no doubt about it.
The Indian markets are showing a bit of resilience amidst all the volatility. What are the data points you are tracking for the benchmark indices?
Aamar Deo Singh: Despite the flare up in tensions between India and Pakistan, markets have been holding up quite firmly and as you rightly said, the overall breadth of the market has been positive. That again is a positive thing which we have seen across the multi-caps – be it the largecaps, smallcaps and midcaps and also across sectors. That is definitely a positive welcome. Apart from that, what we have seen is that the India VIX is also cooling off. So, these are definitely positive triggers.
As far as our markets are concerned, I would say that the upside in Nifty is definitely running into a wall of resistance, somewhere around 24,400, 24,600. So this 200-point on the upside is acting as a zone of resistance because we should understand that we have seen almost a 10% rally in Nifty over the last few weeks. So that has been very sharp, from almost 22,000 levels we have seen it to rally 24,400, so there has to be a breather.
Secondly, if we look at the macro side from a medium-term perspective, we are seeing that still the earnings are not as per expectations. The GDP growth would take time. There are concerns with regard to the tariffs and all that, so that is where the markets are.
Right now, as far as trading ideas are concerned, one stock to look at is IDFC First Bank from the banking space. So, this is one stock which has bounced back from almost 52, 53 levels, currently it is around 68 odd levels.
Technically, the stock is poised for trading higher because it has breached the 65, 66 zone of resistance. So, this is one stock one can look at from a trading perspective for an upside target of Rs 77 with a stop loss of Rs 63. Also, if I look at the fundamental factors, there also we have seen some strong capital infusion in the bank from reputed investors like Warburg Pincus and Abu Dhabi investments. So, that also bodes well for this stock.
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The second stock I would like to talk about is Marico from FMCG space. So, this is one stock one can look at. If I look at the stock, the stock has bounced back significantly, trading slightly around the Rs 725-726 levels. Any pullback in the stock is a buying opportunity for an upside target of Rs 783 and a stop loss below Rs 700 levels.
What are the pockets where you see value? There are some pockets that are doing very well even if the rest of the market is managing to hold on right now. There are some pockets that are doing pretty well. What are these pockets to watch out for?
Aamar Deo Singh: Auto ancillary and auto stocks have started performing, that is one. Secondly, if we look at the banking space, private sector and small banks and NBFCs have witnessed some sharp up move and also some stocks in the FMCG space have started moving up. These are a few sectors which are doing well and are expected to do well in coming weeks.
Give us some sense of how you are looking at India VIX because that is knocking the doors of 19 odd marks and whenever we have seen such elevated levels, it is not good for the markets. Do you think there is a possibility for that to spike up even more?
Aamar Deo Singh: I would say that is a really tough question and that would depend more on how Pakistan really takes this forward. But as you rightly said, markets are more comfortable in the 14 to 16 range for the VIX, anything above that clearly shows that there are some concerns in the minds of the investors. That is being reflected as well.
As far as India VIX is concerned, the recent high which it had made was almost 22 levels. That is one level to watch out for because from there, it has corrected. One definitely needs to be slightly cautious at least for the next couple of weeks because if there is some action or some reaction from the other side, that may take some time. So, one needs to be slightly cautious at the current levels, no doubt about it.
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