Market Update: Anuj Singhal’s Insights on Nifty and Bank Nifty
Anuj Singhal of CNBC-Awaaz has shared a bullish outlook on the Indian stock market following the recent Federal Reserve policy changes. He notes that a significant market boom is underway, with the Nifty index currently maintaining levels above 25,250. He emphasizes that one of the critical pitfalls for investors during this time is to prematurely book profits, stressing that early selling could result in missed opportunities as the Nifty surged from 24,800 to 25,800 in just 11 days.
Nifty Heading Towards New Heights
Singhal suggests that the market is eyeing the psychological milestone of 26,000 points this year, while he has even projected a more ambitious target of 27,272 points for the Nifty. He also pointed out that Nifty Bank is starting to take on a significant leadership role within the market. As evidence, he cites that while the Nifty climbed by 2.2% this month, the Bank Nifty outperformed with a 4.8% increase. Singhal advises investors to remain long in the market, adjusting their stop-loss (SL) levels higher, and to avoid setting specific profit targets. Instead, he recommends placing a trailing stop-loss at 25,550 for the Nifty.
Foreign Institutional Investors (FIIs) Take Center Stage
In another encouraging sign for the market, Foreign Institutional Investors (FIIs) made significant purchases, buying cash worth ₹14,064 crore on Friday alone. This includes a combined total of ₹40,000 crore in cash, index futures, and stock futures, marking it as the largest single-day acquisition by FIIs in history. Notably, their net long contracts have reached a two-month high of 3.6 lakh, with FII index long positions increasing to 61%. Such movements are reminiscent of the last surge seen on June 27 when the Nifty rapidly gained 1,048 points over the next 15 days.
Focus on Large-Cap Stocks
With the substantial FII inflow, analysts are advocating a focus on large-cap stocks, particularly within the banking sector. Singhal points out that this renewed interest is likely due to FTSE rebalancing, but it is clear that large-cap banks are the favored picks. This alignment suggests a potential one-sided rally for both the Nifty and the Bank Nifty in the upcoming months, with many investors who missed the initial rally likely to regret their absence in this next phase. Singhal advises strategizing around large-cap investments, especially in banking, as they are expected to lead the next round of market growth.
Strategies for Navigating Nifty and Nifty Bank
Nifty Trading Strategy
Regarding immediate trading strategies for the Nifty, Singhal states that all identified resistance levels have aligned with expectation, and the market is now operating in ‘blue sky’ territory. The next significant resistance level to monitor is between 25,900 and 26,000. It is anticipated that algo-based profit booking could occur at 26,000, where the Nifty may consolidate for several days before resuming its upward trend. He advises booking profits ahead of any BTST (Buy Today, Sell Tomorrow) opportunities while maintaining a stop-loss at 25,550 for swing and positional trades. Investors are encouraged to buy on dips and to wait for the first hour of market activity before making new purchases. If buying post-first hour, a stop-loss should be set just below the day’s low (minus 50 points).
Nifty Bank Trading Strategy
In terms of Nifty Bank, Singhal suggests a straightforward trading plan: uphold the previous resistance level of 53,350 as a stop-loss while consistently buying on dips. Critical upcoming levels to observe are 54,000, 54,500, and eventually 55,000. It is possible that these levels may be reached before the month’s expiry. Singhal reiterates that this market environment favors carrying positions for wealth creation, as day traders might have fewer opportunities to capitalize compared to longer-term investors.
Disclaimer: The views expressed in this article are those of the experts and do not necessarily reflect the views of Moneycontrol or its management. It is advised to consult with certified investment professionals before making any financial decisions.
