ET Now: What do you think about this particular week that we have seen play out and what are you really penciling in for next week? Are you expecting a correction or consolidation? What do you see happening next?
Rajesh Palviya: Looking at the breakout on both indices, it is clear that we have witnessed a strong short-covering action on Friday, and the way global markets have behaved in the last couple of days, our market has also managed to break out to a new all-time high trajectory. We believe this momentum can extend further. As we head into the expiry week, sectoral rotation is evident, with underperforming sectors starting to participate. The major contribution to this rally came from the banking space, with Bank Nifty gaining around 3.75% this week. We’ve already seen strong short-covering action in private sector banks.
If there is a catch-up rally from PSU banks, it may provide further support to Bank Nifty, possibly extending its gains. We believe Nifty can continue its upward momentum towards 26,000, the next major call concentration area. At this point, one should trail a stop loss towards 25,550 to hold long positions. 26,000 is the immediate target, which could be achieved in the next couple of trading sessions. For Bank Nifty, this rally may extend further, as it is trading near 54,000. If it crosses 54,000, the potential target for Bank Nifty is 54,500 to 54,700 in the next few days, as large-cap private sector banks show strong buying traction. So, we believe that as long as Bank Nifty holds above 53,500, the trend is likely to remain bullish, and one should hold on to positions as the rally could extend further.
ET Now: Given that distribution channels are changing and evolving, what are you really pencilling in when it comes to performance?
Rajesh Palviya: The FMCG sector remained an outperformer, with most stocks in the FMCG basket performing well in the last few days. Stocks like Nestle, Britannia, and Dabur have performed well, even in a volatile market over the past few weeks, as buying interest shifted towards FMCG stocks, leading to breakouts in near-term consolidations. We believe the near-term structure of these stocks suggests further outperformance from the FMCG sector. Nestle and Britannia are particularly attractive, with Nestle potentially extending its gains to 2800-2850, and Britannia looking promising for a rally towards 6500. Other promising stocks in this basket include Colgate Palmolive and United Spirits. The FMCG sector should remain on the buy list for the coming week as momentum could extend further.
ET Now: What are you penciling in for ICICI Bank and the broader banking sector?
Rajesh Palviya: The private banking space may continue to see upside. Most private banks have performed well, and the current week’s upward momentum in Bank Nifty and private banks could continue. ICICI Bank, currently at an all-time high, has shown a strong long build-up in derivatives data, indicating further upside towards 1400 as we approach expiry. Kotak Bank also looks attractive after breaking out of its previous swing high, with potential targets between 1950 to 1960. Overall, largecap banks in the private sector look promising, and we anticipate further upside as Bank Nifty continues to outperform.
ET Now: What are your top bets or trading ideas for the upcoming week?
Rajesh Palviya: First, HDFC Bank looks promising, currently negotiating with its multiple supply zones around 1740-1745. If it crosses this level next week, we could see significant short-covering with a potential target of 1800. It’s a buy with a stop loss at 1705. Second, Havells, benefiting from the consumption theme and trading at all-time highs, shows strong weekly long build-ups, suggesting it could extend gains to 2100. Buy with a stop loss at 2025. Lastly, DLF from the real estate sector looks promising, having broken out of a seven-eight-week consolidation. We expect further outperformance with a potential target of 910; it’s a buy with a stop loss at 865.
