Nifty and Sensex may test the levels of 12300 and 40700 respectively in 2019: Epic Research
Mr. Mustafa Nadeem, CEO, Epic Research
The market amidst with the major event in short term i.e. the Lok Sabha Elections, will have some impact and increase the volatility in market, but this will also be able to establish the plot for a long term trends. Other factors that are likely to drive the market in near term are, lower inflation is main factor that brings in other points to the table. Lower interest rate environment, Federal Reserve Dovish Stance, Higher Capital Inflow and Appreciating Rupee (near term). These are some factors that will drive the Indian equity markets in 2019. Crude oil is an another factor that may cap the upside as the supply side concerns, continuous fall in supply, lower output, Sanctions on Oil producers are fueling the crude oil prices.
We are extremely bullish on the levels of Nifty/Sensex which may lead Nifty to test the levels of 12300 while Sensex should test 40700.
The market for this year seems to be fairly bullish in terms of its trend. The underlying primary trend is bullish which has not been violated yet. Market on higher time frame is looking in much better shape as the noise is less over there. Trending above its longer term moving averages like 50, 100 and 200 gives it a clear thrust on any dips. We have been performing, rather outperforming, the global indices in terms of returns for last 1 year. The intermediate target for market is placed at 12100 - 12200. These numbers now seem to be very close. With Lok Sabha elections on the horizon, we believe there may be some rise in volatility that can hurt any short term directional investor. Hence, it will be prudent to utilize any dips towards those crucial moving averages such as 20 and 50. We believe these dips should rather provide a comfortable risk that can be taken to reap the benefits. One should look to accumulate in the area of 11100 - 11200 as these are point of inflection for this uptrend.
The sectors that are likely to be in focus along with their respective stocks are Financials with ICICI Bank, RBL Bank and Yes Bank, IT with its major players like Infosys, HCL Tech, Utilities and Hotels.