Nifty 50 may possibly breach present all-time highs and hit 17,200 points in the coming months, according to domestic brokerage and study firm ICICI Direct. Meanwhile, Bank Nifty may possibly attain 37,700 points, the brokerage firm mentioned, adding that there has been a healthful base formation on the banking index. However, short-term breathers have not been ruled out. “Temporary breather after ~8% rally over past four weeks would present incremental buying opportunity to build a quality portfolio from a medium-term perspective,” ICICI Direct mentioned in a report. Nifty reached an all-time higher of 16,712 earlier this week.
Buy any dip, Nifty may possibly scale 17,200
“The formation of higher peak and trough signifies the continuance of positive bias,” analysts at ICICI Direct mentioned. The firm believes Nifty 50 could move towards 17,000-17,200 in the coming months as it is the value parity of the previous two rallies seen throughout this year. Since January 2021, Nifty has seen 1,800-points rally twice. In the present situation, Nifty would full 1,800 points at 17,200 projected from June low of 15,450. To attain the mentioned levels, a get on dip approach has been advised.
On the downside, ICICI Direct does not anticipate the index to drop beneath 15,900, which is the earlier breakout region. 50 days EMA is also placed at 15,900.
Bank Nifty
The banking index has remained variety-bound for very a although now, hence forming a base for the next leg of up move. “We expect the index after the recent healthy base formation to break out above the upper band of the range (36,300) and head towards 37,700 levels in the coming month as it is the confluence of the measuring implication of the recent range (36,300-34,800) and the previous all-time high of February 2021,” analysts mentioned.
On the downside, Bank Nifty is not anticipated to breach powerful assistance of 34,500. “Buying the declines strategy has worked well over past 15 months. Hence, the current breather would offer incremental buying opportunity in quality banking stocks,” ICICI Direct mentioned.
What to get?
While Sensex and Nifty scaled fresh highs this week, the midcap and smallcap indices have been correcting. The fall in the broader markets comes just after months of outperformance. Keeping this in thoughts, analysts at ICICI Direct think that now significant-caps will outperform although broader markets undergo larger base formation.
Charts recommend that the IT sector may possibly continue its positive momentum, sitting in the outperform quadrant. TCS, Tech Mahindra, HCL Tech, and Mindtree are seen as possible outperformers although Reliance, Cyient, and Teamlease are pegged as bargain buys by ICICI Direct.
FMCG sector is also placed in the outperform quadrant and is anticipated to continue moving larger. On the other hand, the Banking sector is now supplying favourable threat-reward just after obtaining consolidated in the earlier month. Axis Bank and Canara Bank are seen to be bargain buys.