When Atul Suri first predicted a target of 10460 for the Nifty ten months ago, cynics smirked. Today, after a 35% surge on the Nifty, cynics are beginning to wonder whether there is some merit in Atul Suri’s technical analysis after all.
Atul himself remarked “10 months ago, my prediction looked crazy; today, it looks optimistic; 10 months later, it will look pessimistic”.
Atul Suri made several excellent points in his talk.
First, he pointed out that investors are making a terrible mistake by focusing on the short-term and getting perturbed by the volatility. Instead, they have to keep their eye on the longer term trend and buy on dips. “There is a lot of money to be made by remaining invested in stocks for the long-term” he said.
Second, he predicted that a cut in the interest rates would trigger a rally in Gilt bonds. The yield on Gilt Bonds which is presently 8.1% would slump to 7.2%, leading to enormpous capital appreciation for PSU Banks which are the biggest holders of Gilt Bonds. “PSU Banks will be the big surprise trade for 2015” he said.
Third, Atul explained that the sectors which are showing secular growth and a non-volatile trend are Pharma and Auto + Auto ancillary stocks. He explained that though these sectors had produced several super-duper multi-baggers, more gains are in store.
Fourth, Atul comforted investors that the 35% surge in the Nifty did not mean that the Index had topped. He explained that a lot of great things are happening globally and within India which is not reflected in the gains. He also pointed out that there is no froth in the market at this stage and so there is no danger that a “bubble” has formed. Instead, the target of 10,460 for the Nifty is still intact and it is a buy on dips market he said.
At this stage, we must note that even Amar Ambani of IIFL has predicted a target of 10,000 for the Nifty. He has also identified 7 stocks which investors can buy now.