SAMVAT 2078: Nifty50 likely to touch 21000, while Sensex might hit 70000, says Santosh Meena of Swastika Investmart

Santosh Meena, Head of Research, Swastika Investmart Ltd said that the markets are in a structural bull run that is likely to continue for at least the next 2-3 years, however investors should taper down their expectations.

In an interview to ZeeBiz’s Kshitij Anand, Meena highlighted that the Nifty can test an auspicious mark of 21000, and the Sensex may touch the level of 70000 by the next Diwali. Edited excerpts:

Q) A holiday-shortened volatile week. It remains to be seen how the D-Street reacts to the US Fed policy outcome. What should be the strategy for the coming week after a 4% fall seen from the recent highs?

A) We are underperforming after a long period of outperformance and the short-term texture has changed to 'sell on rise', where we may start next week on a positive note on the back of positive global cues as the market is believing that the US Fed may remain flexible, however, there is a risk of sell-off at higher levels.

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The 18000-18200 area is a critical supply zone and we may again see selling pressure from this area, while if the Nifty manages to take out this zone decisively then we can say that the correction has ended and the market is ready to move higher again.

On the downside, rising 50-DMA will act as immediate support that may coincide with the 17700 level, and below this, the Nifty50 is vulnerable to further weakness towards the 17450-17250 zone.  

Q) We saw plenty multibaggers in SAMVAT 2077. Do you think SAMVAT 2078 will be as vibrant? What should investors do with stocks, which have more than doubled in the last 1 year?

A) It was a sparkling Samvat 2077 for the investors where the market rewarded investors with handsome returns in many pockets.

We are in a structural bull run which was started in March 2020 and I believe this bull run is likely to continue for at least the next 2-3 years therefore Samvat 2078 may also reward the investors with good returns however investors should taper down their expectations because things won't be as easy as it was in Samvat 2077.

We may see some meaningful correction which we haven't seen in the current bull run but every correction will be a good buying opportunity.

Stock selection will be the key for the investors in Samvat 2078. Midcap and Smallcap stocks tend to outperform in a strong bull market and as I said we are in a structural bull market which is likely to continue for at least the next 2-3 years.

The outperformance may continue but I will again say that things won't be as easy as it was last year, therefore, investors should stick with quality names.

Q) What is your call on markets for SAMVAT 2078?

A) We are in a structural bull run that is likely to continue for at least the next 2-3 years however investors should taper down their expectations.

If I talk about the levels, then Nifty can test an auspicious mark of 21000 and Sensex may touch the level of 70000 by the next Diwali.

Q) Which sectors are likely to lead the next leg of the rally in SAMVAT 2078?

A) I am very bullish on the domestic economy facing sectors like Real estate, power & infra, Capital goods, and Banking.

If I talk about the real estate sector then there is a turnaround story after 10 years of underperformance where the last 5 years were very painful due to demonetization, NBFC crisis, RERA, etc but things are looking very bright now and thanks to low-interest rates, stamp duty cuts, supportive government policies and consolidation in the industry due to RERA.

Similarly, Power, infra, and Capital goods sectors are coming out of 14 years of 'Vanvas' and the market has started the celebration for this where this celebration is likely to continue for the next couple of years because there is valuation comfort as well as strong growth outlook.

If the economy is showing a strong recovery, then the banking sector should also do well where economy facing banks like SBI and ICICI Bank may outperform.

Q) One big change from the last SAMVAT to this is the additions of retail investors. There are more than 8.5 cr retail investors registered on BSE. What advice would you like to give them for next year?

A) One of the most interesting things about the current bull market is that it is no more purely dependent on institutional investors because retail participation has surged significantly especially in the last one and a half years.

The participation is likely to rise further from here thanks to the technology; however, I am little worried about the one factor is that most of the new retail investors haven't seen any meaningful correction yet and the market is not charitable enough to make you easy money for a long time, therefore, it will be interesting to see how they will behave when the market witnesses any meaningful correction.

I would advise them to stick with quality stocks without worrying about short-term volatility because they can create great wealth in the next 2-3 years in the market.

Q) Any big learnings which you would like to share with leads especially Gen Z on how not to lose wealth especially when things start to go south?

A) The first thing, I want to say to new investors is that make SIP the important ritual of your life to create peaceful wealth in the long run.

Investors should stick with quality names because they will always will be the first to bounce back when things turn northwards after a tough time while you will never get the same level again in many stocks that have quality concerns.

Q) Any 3-5 trading ideas for the next 3-4 weeks?  

A) My top pick is Garden reach shipbuilders which have witnessed a multi-month breakout and I believe most of the shipping companies are likely to post a strong set of results on the global backdrop. On the upside, it may easily see the level of 325 in a couple of weeks while 240 will act as strong support now.

Textile stocks are also showing relative strength where Vardhman textile may outperform, and we may see the level of 2300 in the coming days.

Real estate is in strong bullish momentum where Kolte Patil may continue to do well for an immediate target of 360 while Tata Motors may again resume its bullish momentum after a period of consolidation where 560 is the next target level.  

(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.)