Nifty target 37,000? This chartist shares his long term view on the index
The CLSA chartist Laurence Balanco believes that there is significant upside for the Nifty PSU index of as much as 60%.
Laurence Balanco of CLSA is of the view that the Nifty 50 index, by the end of the decade, could see targets of as high as 37,000. His target range for the Nifty by the end of this decade ranges from 30,000 to 37,000. From current levels, this implies an upside potential between 28% to 58% on the Nifty.
For the more near term, Balanco believes that the Nifty is in a consolidation period, where the upside is limited to levels of 23,700 - 23,800. "The level we are highlighting as where you accumulate or rebuild positions here is on volatility and corrections back towards the 21,000 area," Balanco said in an exclusive interaction with CNBC-TV18.
Balanco also sees more steam left in the PSU rally. The Nifty PSE index had gained over 80% in 2023 and has continued with its upward trajectory in the first half of 2024 as well. The CLSA chartist believes that there is significant upside for that index of as much as 60%.
"So we think that's a space that you can still accumulate in if you want to get more specific. PSU Banks are still in that uptrend, and if you look at the relative chart of the PSU Banks versus a broader banking index, the recovery you had from the 2020 Covid-19 lows has only retraced half of the decade long downtrend," he said.
Some of the other key takeaways from the Laurence Balanco interaction:
The Nifty 50 index has risen 5% in the last one month and has seen a recovery of over 2,000 points in the last one week after the Lok Sabha election results.
For the more near term, Balanco believes that the Nifty is in a consolidation period, where the upside is limited to levels of 23,700 - 23,800. "The level we are highlighting as where you accumulate or rebuild positions here is on volatility and corrections back towards the 21,000 area," Balanco said in an exclusive interaction with CNBC-TV18.
Balanco also sees more steam left in the PSU rally. The Nifty PSE index had gained over 80% in 2023 and has continued with its upward trajectory in the first half of 2024 as well. The CLSA chartist believes that there is significant upside for that index of as much as 60%.
"So we think that's a space that you can still accumulate in if you want to get more specific. PSU Banks are still in that uptrend, and if you look at the relative chart of the PSU Banks versus a broader banking index, the recovery you had from the 2020 Covid-19 lows has only retraced half of the decade long downtrend," he said.
Some of the other key takeaways from the Laurence Balanco interaction:
- Prefer Pharma stocks over FMCG
- Remain underweight on FMCG as well as in IT. There has been a bounce in IT but it maintains its relative underperformance.
- Broader software sector has seen a breakdown from a topping pattern.
- Software names globally looking very vulnerable.
- Not seeing any imminent breakouts on the energy side
- US remains in an uptrend but need to get selective
The Nifty 50 index has risen 5% in the last one month and has seen a recovery of over 2,000 points in the last one week after the Lok Sabha election results.
(Edited by : Hormaz Fatakia)
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