Not just Jefferies' Chris Wood but this analyst also sees Sensex hitting 100,000 in 5 years

Santosh Meena, Head of Research, Swastika Investmart Ltd says that the chart structure for Sensex is very bullish as it entered a fresh expansion phase after it crossed the 45000 level.

In an interview to ZeeBiz’s Kshitij Anand, Meena highlighted that if the Nifty50 manages to hold 17438, then we can expect a bounce back, but the index needs to cross the 17800 level to gain strength towards 18300-18600 levels. Edited excerpts:

Q) A bullish week for Indian markets in the run-up to Budget and post that as well. Benchmark indices rose over 2%. What led to the price action?

A) The market had witnessed meaningful correction ahead of the Budget on the back of weak global cues therefore the market was very light near the budget.

If we talk about the budget then it was good from the market perspective as there was no negative surprise, therefore, we saw a bullish reaction in the market post-the event.

Global markets also calm down after a sharp fall; additionally, there were too many shorts in the system that also helped in a short-covering rally.

Q) Jefferies' Chris Wood Sees Sensex Hitting 1,00,000 In 5 Years. What does your chart check suggest?

A) The bull markets always start with extreme pessimism note and the current bull market was started in March 2020 with so much fear.

The chart structure is also very bullish as Sensex has entered a fresh expansion phase after it crossed the 45000 level. The index is making higher highs and higher lows formation and every consolidation and correction is a good buying opportunity.

The target of 100000 in Sensex is easily achievable in the next five years.

Q) Where do you see markets post Budget 2022? What should be the ideal strategy for the coming week? Important levels to track on Nifty and Nifty Bank?

A) The Nifty50 seems to be halting near the 20-DMA after a strong pullback where 50-DMA of 17438 is an immediate and important support level.

If the Nifty50 manages to hold this level, then we can expect a bounce back, but the index needs to cross 17800 level to gain strength towards 18300-18600 levels.

If Nifty slips below its 50-DMA, then we can expect further weakness where the budget day's low of 17244 will be the next important support level while 17000-16800 is the next demand zone.

Banknifty has a comparatively strong structure where 38500-38200 is a strong demand zone to buy the pullback while if it manages to cross 39500 level then 40200 is the next target level.

On the downside, 37700 is the next important support level; below this, we can expect any major weakness.

Q) In terms of sectors – metals, consumer durable, and pharma rose 4-6%. What led to the price action?

A) This budget and last budget were mainly focused on growth through the manufacturing and infrastructure sector; therefore, we are seeing a sentimental positive impact on the metals and consumer durable sector.

If we talk about the metal sector then commodity stocks tend to do well in inflationary environments whereas contrary to global central banks, China is moving towards an easy monetary policy.

Pharma sector doesn't have any major trigger to outperform; however, they were underperforming for a long time and therefore we are seeing some bargain buying at lower levels while heavyweights like Sun pharma is helping the index to move higher after its strong set of earnings.

Q) Death Cross was observed in Adani Ports, as well as Karnataka Bank? What should investors do?

A) When 50-DMA crosses 200-DMA on the downside then it is called Death crossover which is generally considered a negative structure; however, it doesn't work every time because other factors also need to be considered and it is a lagging indicator.  

If we talk about Adani Ports, then most of the important moving averages are overlapping with each other around the 740 level and the stock is also volatile around this level.

The stock is forming a Symmetrical Triangle formation and is waiting for a breakout, but there is a good chance of breakout on the upside. If it manages to cross the 760 level, then we can expect a decent rally in this counter.

If we talk about Karnataka Bank, then it also has a slightly bullish structure despite a Death crossover. The counter is trading above most of the moving averages however 75 is a critical hurdle; above this, we can expect a positive momentum.

On the downside, 60 is a key support level; below this, we can expect any major weakness.

Q) Any break-out stocks: Top 3 trading strategies for next 3-4 weeks?

A) Technically, we are seeing a breakout in BSE, Speciality Restaurants, and VRL logistics, and these stocks may outperform in the coming weeks.

If we talk about the targets and stop losses then BSE has a target of 2500 with a stop loss of 2100, Speciality has a target of 145 with a stop loss of 105, and VRL logistics has a target of 600 with a stop loss of 490.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)