Ready to lead banking and power sector market recovery: Dharmash Shah

“This is a good indicator, emotional indicator to understand how these things move forward if you look at the width of the market again. The percentage of total CNX 500’s total 200-day moving average is around 12% to 13%, “Dharmash Shah says, ICICI Direct.

This is the fourth consecutive session where we are enamored with a beautiful range on the Nifty. In fact, today we have a 22,800 psychological .This broke down from the unique support level. Tell us from here on what level you are looking for for next week?
Dharmash Shah: Yes, definitely, if you look at the market for the last five to six trading sessions, we are trading in this range of 23,000 to 22,800. Therefore, there are about 200 to 300 points trading ranges.

Now, the point is that if you take a look at the trading range, it gets more contract. The range is becoming more and more narrow. We believe that 22,800 has very strong support for the Nifty.

Either way, if it breaks these layers, we can see a little sales of panic on the basis of the closure, maybe there is a very strong support for 22,600 Nifty. But finally next week we believe that technical pullback is on cards.
If you look at the width of the market again, this is a good indicator, emotional indicator to understand how things move. The percentage of the total CNX 500’s total 200-day moving average is around 12% to 13%.

Therefore, whenever the percentage approach to reading 12% to 13% only trades a 200-day moving average of total CNX 500, there are six occasions in the last two decades where such occasions have been penned out, during which sustainable bottoms have been found. Those stages.

Therefore, we believe we are not at the bottom but maybe in the short term we are below 22,800 to 22,600 and we expect a pullback from 23,300 to 23,500 next week. Therefore, drowning should be a strategy to proceed.

But which area can really participate in this pullback, any field that is standing for you?
Dharmash Shah: Certainly, if you take a look at the Nifty, Bank Nifty is something that is moving relatively. There is no doubt in the current corrective phase that we are looking at the drawdown in the bank Nifty, but, to 000 48,7, 47,71 is very strong support for the bank Nifty and the banking is an area because the rally should proceed because the bank. The Nifty contributes 35% to the Nifty weight.

Therefore, except for the re -banking PSU as a sector, we have seen well sold in the index around 25% to 26%, but within the PSU, the power space is now one that gains a velocity in the last few trading sessions.

Shares like NTPC or JSW Energy should return. Apart from that power space, even in this corrective phase again, the space is clearly outperforming the metal. Therefore, as a field, the metal remains positive to move forward.

So, around I would say that we will see the short cover more. Therefore, maybe real estate, infra, capital goods, so these are places we expect to be pullback next week.

Also, tell us about the broad market. Now, for two sessions till yesterday we saw the widespread markets ahead of the benchmark and we still went ahead today but the midcap has slowed down. But any signs of reversal in widespread markets because there has been a lot of improvement?
Dharmash Shah: So, just want to share the data with you. If you look at the history of midcaps and smallpox ap ps. Therefore, inside the bull market, there is a correction part and parcel. So, if you go back to the history of the last two decades, the midcaps of the bull market tend to improve on average 25% to 30% within the smallcap and the post that we both become very suitable pullback indicators.

If you look at the current context, the improvement in the midcap and smallcap, we are done in MIDCap with 21% and in the smallcap we are around 24%. Therefore, 3% to 4% correction cannot be ruled out in midcaps and smallcap.

But if you look at the history of the historical scalp, perhaps the risk-risks may seem more convenient at the current levels and maybe we can see the design of the bottom of the midcaps and the Smallic AP PS and the rally can be seen in the next three. Months for midcaps and Smallk app.

Therefore, looking at the history of the history, it indicates so the damage may be limited to the current levels and we expect more base formation in midcaps and smallcap. So, my suggestion to you is to see good quality stocks in midcaps and smaller app. It’s a good time to gather and build portfolio at the current market price.