After a disappointing truncated week, what cues should one take going into this week?
Aamar Deo: Markets continue to trade with a negative bias for the past couple of weeks, on the back of a sell-off and profit booking witnessed ahead of the Union Budget. Investors have been prudent to lock-in profits in stocks that they hold as they understand well that markets shall be highly volatile around the Union Budget 2024 session.

Global cues have been overall positive, lower crude prices and optimism over expectations of a US Fed rate cut in March along with steps taken by China, to shore up its economy, have supported global markets. However, we have witnessed FII selling last week, as well, dampening the overall investor sentiments. But these were on expected lines, as this being a budget week, we are expected to witness increased volatility, hence traders and investors alike, are most likely to keep lighter positions till clarity emerges as to the outcome of the budget and its overall likely impact on the economy.

What are the next important levels for Nifty and Bank Nifty?
Aamar Deo: Nifty lost over 1% WoW, whereas Bank Nifty lost over 2.5% WoW, clearly reflecting the fact that it was the Bank Nifty, and there also, HDFC Bank, with the highest weightage in Nifty (13%) & Bank Nifty (30%), lost around 3% WoW, leading to a crack in both the major indices.

Overall, markets needed a trigger to correct ahead of the budget and HDFC Bank provided the same. The levels to watch out for Nifty on the downside, is support around the 21,000-21,100 zone whereas resistance is seen around the 21,600-21,700 zone.

For Bank Nifty, support is seen around the 43,500-44,000 zone whereas resistance is seen around the 46300-46500. It is advisable to trade with caution as enhanced volatility would be witnessed in the week, as it being a Budget week.

The pain point has largely been banks and more so the HDFC Bank. How should one navigate this period if one is invested in a bank and his view is also short term or positional?
Aamar Deo: Primarily, the sharp correction in HDFC Bank led to the overall bearish sentiments in the banking space last week with HDFC Bank losing almost 16% in January alone, clearly highlighting the disillusionment amongst investors over the future outlook of the bank. HDFC Bank has strong support around the 1,350-1,400 zone, where buying could emerge, whereas resistance is seen around the 1,570-1,600 zone. Those invested in HDFC Bank, should look at the investment from a longer-term perspective and exiting around crucial support zone, should be avoided.

In light of SBI declaring its earnings next week, what is your view on PSU banks which have done relatively well?
Aamar Deo: PSU banks, majority of them, have delivered superior returns in January, with Union Bank, Bank of India and Bank of Maharashtra, posting double digit returns. Overall, the PSU Banking space outperformed most of the other sectors as investor interest over the past couple of months, has shifted towards PSU stocks, be it banking, railways, power, mining, to name a few.

Overall, investors would be cautious ahead of SBI quarterly earnings report, given the performance of HDFC Bank, with crucial support for SBI seen around the 550 level whereas resistance is seen around the 660 zone.

Next week is also a Union Budget week and are you expecting some big bang announcements that could have a bearing on specific sectors or stocks?
Aamar Deo: Ahead of the general elections, markets expectations continue to remain mixed, as most likely, this could be an interim budget, with focus expected on enhancing spending in the infrastructure, job creation, tax exemptions for the salaried class as well as the corporate, tax sops for sectors in the green space, incentives for manufacturing sector along with sops for the exporters.

It would be interesting to watch the deliverables in this budget, as hopes run high in a few quarters, whereas to a large extent, remain uncertain as to the outcome of the budget. You never know, it might also turn out to be a populist one, just ahead of the crucial elections.

In the broader markets, Oracle, NBCC and RITEs have been market outliers with 28-30% weekly returns while Zee, Tanla and Oberoi Realty among biggest losers. What should investors do with them?
Aamar Deo: Oracle has gained almost 60%, NBCC is up 40% whereas RITES is up 36% in January itself, offering investors superlative returns in such short span of time. Whereas on one hand, Oracle & RITES trade at record highs, NBCC is still far from its all-time high of 145, witnessed in November 2017. Investors in these particular counters should look at booking part profit and trail the balance as the uptrend in all these three stocks, continues to remain strong.

On the other hand, ZEE was down almost 30% last week, post the news of calling-off the merger with Sony, Tanla corrected by 12% WoW, and Oberoi Realty, corrected by 13% last week. Zee is now being affected purely by news flows, so its best to be cautious in this stock, whereas in the case of Tanla, it is likely to trade in a range of 900-1200, with upside remaining capped. Oberoi realty appears to have formed a short-term top, with crucial support seen around the 1200 mark, so investors should look at exiting their positions as and when they identify such opportunities.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)