Here’s why Vishal Malkan is bullish on metal sector

“I think if you look at the overall market rally in the last one year, it has been very sector specific,” says Vishal Malkan,

What do you make of this? Do you think this breakout is something that can take us to much higher levels or do you see that perhaps there is a bit of a buying fatigue at play, people are waiting by for the earnings to set in? What is your view for the index in the very immediate term, let us say one week?
I think the way Nifty has been performing above that 22,700 mark is commendable. It is staying above that with volumes and there is broad participation also from midcaps and the big banks, as well as the metal sector.

So, I think it will sustain and next one week looks good. We can look at the target of 23,000-23,100 in the next few trading sessions for Nifty.

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What is your thought also on the broader markets, is that something that one could watch out for and anything interesting on that front?
Yes, I think if you look at the overall market rally in the last one year, it has been very sector specific. Now, in the last year, we saw that infrastructure and the realty sector did very well and now the sector rotation is happening and we have seen that metals have taken the lead. So, I think we should go with momentum trading. The current flavour of the month or the week is metal sector and best is Jindal Steel for that particular sector.

But what is that pocket of strength that you would go all out and bet right now? Is it metals? Is it real estate? And which are the names that look the strongest right now?
Yes, as I said, metal is the best one to go with. I always believe that go with the strongest and I think in that Jindal Steel looks the best which is trading at around 925. I still look at targets around Rs 975 to Rs 1,000 in the next few trading sessions with a stop loss of Rs 900.

But what is looking weak because PSU banks have been coming off. They have not really participated in that rally. Is that a space you would recommend people to book out of?
I think it is too early to book out on any of these stocks, as long as the momentum is there. We can put a trailing stop loss. It is just a small red candle we can see in the PSU banks as of now, so not much of a selling pressure there.

So, I will wait for further signals to exit my positions if I am holding on the PSU banks and at the same time we can see a fresh breakout happening in the private sector and especially ICICI Bank which was consolidating since long and has taken out above that 1100 mark with good volume and patterns. So, I think that is a fresh buy with a stop of Rs 1,090 for targets of Rs 1150 and Rs 1175.

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