Before the next rally, the market may cool slightly, buy on the decline in quality stocks

Rahul Sharma, Equity 99

Bharti market is trading at record high. Sensex is seen trading above 58,000 and Nifty above 17,000 for the first time on the back of strong economic recovery, heavy liquidity in the market and good global cues. The market is getting strong support from IT, Consumer Packaged Goods, Metal and Realty. However, in this rally, the banks are seen standing a little far away.

Indian markets have outperformed Asian markets so far this year. Nifty Midcap 100 seems to be scaling new highs after the August selloff. It has touched the level of 29,000. Blue chip stocks have also participated in the rally so far. The leadership of this pack has been in the hands of Reliance. Nifty is currently trading at a price-to-earnings multiple of 26.60x. In March, it was at a price to earning multiple of 19.38x.

Know from the market experts on the occasion of Ganesh Chaturthi, the stocks that feed the modak of profit

After such an uptrend, it is natural for the market to have a slight correction for the next round of bullishness. Now investors are advised to keep some profit in their pocket if they have achieved their target. Traders are advised to place a trailing stoploss on their positions. At present, investors should adopt a buying strategy on the downside in those stocks which are doing fundamentally well and which have potential to rise further.

It is expected that there will be good growth in the banking and auto sector going forward. Consolidation is being seen in banking at this time. Banking sector will get good benefits from further economic recovery. Auto stocks recently saw a fall on the back of chip shorts. Chip shortage problem is temporary. After this problem is resolved, auto stocks will see a strong rally. A thrust on electrical vehicles will also boost auto stocks.

Market at record high, foreign money came out the most from these sectors in the second fortnight of August

Top three picks of Rahul Sharma

Mahindra Bank Box

Kotak Mahindra Bank is consolidating in the range of 1,700 -1,850 with effect from March 2021. Recently it has sold its stake in Airtel Payments Bank. We can get to see the level of Rs 2,050 in this stock.

Mahindra & MahindraThe stock has lost over 20 per cent since its February highs on chip shorts and production cuts. The company has recently launched its XUV700 which has created panic in the market. Chip shortage is not a permanent problem, it will not last long. This stock must be included in the portfolio this fall.

Hero MotoCorp

Hero Moto is the market leader in the two-wheeler segment in India. It has recently launched its first electric vehicle. The stock has lost 20 per cent since its February highs. Buying advice will be given in this stock with a target of Rs 3,650.

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