Bullish on energy, private banks, NBFCs, tyres: Sacchitanand Uttekar

By Sacchitanand Uttekar, Assistant VP Technical (Equity), Tradebulls

Where are we?
The tug of war between the bulls and the bears could continue in the coming weeks as well. As indicated by the short-term time cycle of 25 days, the index is yet to near the time-wise reversal zone which could be witnessed near the first week of September.

Broad-ranged action is likely to be witnessed till the early part of September series with major support near 9,600 while resistance near 10,000.

What is in store?
Traders should resort to mean reversion strategy and avoid aggressive positions on either side.

We expect the index to establish a base close towards 9,600 for the next up move towards 10,400 as we expect the secular upmove to remain firm so far as 9,440 holds. Therefore declines, if any, from here on should be utilised to add quality stocks.

What could investors do?
Investors should utilise this opportunity to build a rock-solid portfolio with diverse mix of largeand mid-cap stocks. We continue to remain bullish in sectors such energy, private banks, NBFCs, tyres, and fertilisers, which continue to display steady strength.

Amongst stocks HPCL, HDFC Ltd, IndusInd Bank, Apollo tyres, Tata Motors, Deepak Fertilisers, KSCL , Sri pipes, Lupin, Emami & Tata Steel are some of the few names on our radar. Interest for calls which will act as resistance for the market on the upside.

While on the downside Nifty strike 9,800 put option has the open interest, which will act as a support for market heading into the expiry week. Thus, the index may see sideways trend in this range of 975010000 going forward.

On the downside breaking below 9,700 levels index may see decline towards 9,450 levels, which is the previous swing low seen in June. The Nifty put-call ratio has moved up to 1.22 from recent low of 1.07 as index has stabilised.

India VIX had seen a jump to 15 levels after consolidating at lower levels. It has again retreated down to 12.57 levels on Friday. But going forward, if the VIX starts forming higher lows, then it would be cause of concern for the market. We like Tata Steel, Hindalco, Vedanta, Havells, Ambuja cement and CESC for an upside in short term.