Bears overpower bulls; Nifty heads towards sub-8,200 levels: Sandeep Wagle

In an interview with ET Now, Sandeep Wagle, Founder & CEO, Power My Wealth, shares his views on what kind of downside investors should expect in the coming sessions. Excerpts:

ET Now: Friday really saw early signs of a correction coming in the pharmaceutical space. Is that something to read too much into or was that sheer profit taking?

Sandeep Wagle: It was something more than profit taking. The Nifty at 8,500 looks a certainty now. Probably 8,450-8,500 on the Nifty will be tested. I would not be surprised if even that is also taken out. There was a hope that the NSE's benchmark will hold on to 8,600 levels. But that has not been the case. The bulls have clearly been overpowered by the bears. We may begin a journey towards 8150-8,200 in the next two or three weeks. Nifty should trade at sub-8,200 levels. In such a scenario, I do not think any sector, whosoever strong it may be, will hold on to; not even pharma and IT stocks. We have seen profit taking in pharma names; but further correction is likely.

ET Now: What would you do with stocks such as Sun Pharma Advance Research, Aurobindo or Ajanta Pharma?

Sandeep Wagle: You cannot trade these stocks in the first place.

ET Now: But, Aurobindo, you can…

Sandeep Wagle: As an investor, they should only be bought on dips.

Ajanta Pharma at a level of Rs 1,120 can fall towards Rs 1,060-1,050, which would be the right level to buy it.

When I see Nifty at 8,200-8,250 levels, it does make sense to expect those levels. Aurobindo Pharma will go towards Rs 1,100-1,080, where I would look at accumulating it as an investor or as a position trader. Having said this, talks of short-tern would yield nothing

ET Now: What about your top call?

Sandeep Wagle: I would recommend a sell in BHEL, with a stop loss of Rs 255, for the target of Rs 220. I would also recommend a sell in ICICI (that has given a very clear breakdown) with a stop loss of Rs 325, for the target of Rs 285.