Quality midcaps presenting good buying opportunity

By Swapneel V Mantri, Technical Analyst Institutions, Sushil Finance

Where we are: Markets witnessed a healthy correction in week gone by withstanding the mid-week scare of ADAG group bond defaults. Nifty bounced back from the lows of 10,090 levels to close firmly above the support zone of 10,200 at 10,283 buoyed by Moody’s sovereign ratings upgrade.

What is in store: Expect Nifty to trade range bound with bullish bias. Levelswise 10,350-10,390 immediate target zone. Close above 10,400-10,450 levels to see Nifty heading towards 10,520-10,600 levels. On the downside, 10,200-10,190 remains a good support zone.

What could investors do: The much needed cool-off in markets has presented a good buying opportunity in some of the quality frontline and midcap stocks. Investors can make the most of the current market lull by accumulating quality scrips at lower levels and consolidating the portfolio holdings.
Sector-specific, banking space is showing lot of promising pattern breakouts and offer a good buying opportunity for a longer-term price appreciation.

One could look at accumulating Axis Bank, SBI, Canara Bank for medium to longer term targets of 621, 373, 490. Further, NBFC counters, which have been in downtrend, are showing signs bottoming out and one can look at accumulating Repco Home Finance, LIC Hsg, REC for higher targets of 720, 642, 176.

Among the dark horse, Nifty IT index is showing a signs of uptrend revival and one can consider accumulating TCS for higher targets of 2,850-3,200 over medium to long term.