Investors are advised to make partial investments in all blue chip stocks as indices and stocks have corrected more than 35 per cent from their recent highs
Bouncing back from the four-day bloodbath on Dalal Street, Sensex and Nifty gained in Friday’s trade. The 30-share Sensex has risen nearly 2,000 points from day’s low while the broader Nifty 50 index jumped to reclaim 8,850-mark in intraday trade today. The headline indices Sensex and Nifty have fallen close to 10 per cent each since Monday’s opening level of 33,103 and 9,588 respectively. With today’s surge in the markets, some might feel that the volatility has subsided, but analysts are of opposite view. “Today’s move may be seen as a short covering by traders due to the weekend as owing to uncertainty people wouldn’t like to carry any directional positions,” Narendra Solanki, Head Fundamental Research-Investment Services, Anand Rathi Shares and Stock Brokers told Financial Express Online.
Approach cautiously, don’t rush to invest at one go
Despite today’s 4 per cent gain, S&P BSE Sensex and Nifty are still 30 per cent off from their respective record high of 42,273 and 12,430 hit earlier this year. As far as buying opportunities are concerned, Solanki said that right now there is still a lot of uncertainty and we don’t even have monthly data of this outbreak in India and its effects. “Investors should not look at broader market indices and should focus more on respective quality, growth stocks and their valuations,” Solanki said adding that one should approach cautiously and not rush to invest all their cash at one go.
Investments can be made in blue chip stocks-
Investors are advised to make partial investments in all blue chip stocks as they have corrected more than 35 per cent from their recent highs, says Technical analyst Brijesh Singh. “Since the market is getting corrected from the high of 12,430 made in January 2020 and the recent low of 7,832 touched in March 2020, in today’s session we have witnessed the pull back rally with an increase in volume. So if we take the swing low made in February 2016 (6825) and draw Fibonacci Retracement, Nifty got corrected more than 76.4% which has value of 8,147,” Brijesh Singh said.
Healthcare, Pharma sector look attractive
Healthcare sector is looking very attractive to us because it is showing relative outperformance in the current market fall and the Pharma sector may witness positive return this time after four years of a downtrend, says Santosh Meena, Senior Analyst, TradingBells. Coronavirus event comes out as the biggest lesson for the world where all the countries around the world are likely to spend more on health care budget which is the main reason for the attractiveness of the healthcare sector, Meena said. The top stock picks from heathcare sector are Divi’s Lab, Dr. Reddy, IPCA Lab, Aurobindo Pharma, Apollo Hospital, Thyrocare, Metropolis, and Lal Path Labs.