Market

CLSA sees Nifty at 18,800 in the long term


MUMBAI: CLSA‘s Global technical analyst Laurence Balanco sees the Nifty heading to 18,800 in the long term. Sydney-based Balanco said the Nifty is currently making its way towards the objective of 14,100-14,200 in the immediate term.

“If the price structure and accompanying technical indicators are compatible with a near-term peak at the 14,100-14,200 area, we will look to take some profits. If they are not compatible, then there will remain greater bullish potential,” said Balanco in a note on Thursday. “…from a long-term perspective, this impulsive advance off the March low is seen as the initial leg of a new bull cycle which followed the cyclical bear market decline off the May 2019 highs,” added Balanco.

Balanco said this long-term structure provides us with a multi-year upside target of 18,800 for the unfolding advance off the March lows.

Indian stock indices hit their lowest level in four years in March this year after a sharp sell off in the wake of coronavirus outbreak turning into a pandemic and bringing most economic activities to a grinding halt. Nifty hit a low of 7,511.1 and Sensex hit a low of 25,638.9 on March 24.

As cities and countries opened up after weeks and months of lockdown around June-July, economic activity started picking up. Indices have gained more than 80 per cent from those March lows, and more recently got a lift from development of vaccines for coronavirus.

Balanco’s has outlined a case for a potential structural breakout in emerging markets, which is also his key call for 2021.





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