NSE Nifty 50 has more than doubled from the lows of March 2020, hitting a record high of 15,432 earlier this week. The rally has been fueled by Union Budget optimism, foreign fund inflows, and buoyant global markets. Naveen Kulkarni, Chief Investment Officer, Axis Securities, tells Surbhi Jain of Financial Express Online that NSE Nifty 50 may reach 16,000 by as early as the end of March 2021. Naveen Kulkarni also says that Indian share market is focussing on value and demand revival. He shares three trading ideas for next four weeks which may offer good returns to the investors. Here are edited excerpts:
1. Is it the time to buy, book profits or sit on cash in the current markets?
The markets have rewarded risk taking in the last one year, and cash positions have resulted in severe underperformance. The market is now on sector rotation and focussing on value and demand revival. So, playing the sector rotation theme will deliver decent returns.
2. Where do you see Sensex, Nifty by the end of this fiscal? What are the key support and resistance levels?
Our NIFTY target by the end of the financial year is 16000. Technically, we see support at 14000 level and resistance at 16000 over an year perspective.
3. In the coming weeks, should investors increase allocation to defensive sectors?
Not really. Classic defensives like FMCG, Pharma could still underperform while IT could see allocation. So, churning into defensive sectors may not be a great theme.
4. Do you think the Nifty 50 index is entering a consolidation phase? How should traders position themselves in this market?
The market should consolidate and set up a solid phase for the next move. During this phase, sector rotation will play out.
5. What are your 3 trading ideas and their rationale for next four week?
Our trading ideas are:
a) Bank of Baroda: PSU bank rally will continue and BOB is one of the better placed PSU banks
b) JK Lakshmi Cement: Cement companies will do well and JK Lakshmi Cement is undervalued and could see traction
c) Eicher Motors: Discretionary stocks are likely to outperform and Eicher has corrected post results. Good time to accumulate.
6. If an investor wants to deploy Rs 1-3 lakh post Union Budget 2021, what is a possible portfolio option?
Allocating to banks including State Bank of India (SBI) will deliver good returns.