Expect Power, OMC stocks to outperform in short term, says Rajesh Bhosale of Angel One

Here are the edited excerpts from that interview:

Exuberance in global markets and return of FII money led Indian benchmark indices to hit a high on Nov 24. What is your reading of market movement this week?

The global markets have strongly bounced back in last one month backed by easing inflation number. Our markets were already outperforming and the support of global peers have fuelled the rally. Foreign institutional investors (FIIs) have also turned optimistic as they turned buyers in cash segment in the November month. In the Index futures, their ‘Long Short’ ratio increased to 77%, as on Thursday, November 24. We remain bullish on the market where we expect a northward journey to continue.

Where do you see the indices in the coming week?

The Bank Nifty continued with its rally in the week gone by as it gained for the eight consecutive week. In the week ending November 25, Sensex entered an uncharted territory. Nifty is likely to follow this steps and in the coming week as well, one can expect Nifty moving towards 18,600 – 18,750 levels. Traders should maintain positive bias and should use dips to go long. Immediate support is placed around 18,300 whereas strong base formation is visible at 18,100.

IT and banking sectors saw a strong performance this week. are these long-term bets? Any favourite sectors?

Banking space has been the charioteer of the recent uptrend and especially PSU banks have given mesmerizing moves. We remain positive on this basket but ideally one should be selective and wait for dips to enter positions as Low Hanging Fruit is already gone.

IT space has started chipping in since the last couple of months after being in pain for the major part of this calendar year. The IT index is still far from its all-time high but considering the prices crossing the 200 SMA and previous swing high, we sense further strong up move in this basket. TCS and Infosys are the top picks from the front line whereas Persistent and MPhasis are the favorite picks from the mid-cap basket.

Broader markets have not participated in this rally. Any reason?

The rally was majorly driven by Banking space and front line counters as the geopolitical tensions were looming in the background and as the investors and traders preferred safe bets. But now the Nifty Mid-cap 100 is interestingly placed and with Nifty 50 about to mark a new high we are seeing confidence back in investors / traders which is likely to bring strong traction in this basket as well.

What are the sectors that are expected to outperform other segments?

Power and OMC stocks showed strong momentum during the fag end of the week; this segment is likely to continue momentum in the coming week. Traders can opt to trade in this segment on Intra-week dips.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.