Nifty can go up to 40K-50K in 3-4 years: Subodh Gupta

Synopsis

Subodh Gupta analyzes Nifty correction, highlighting 18,500, 18,750 levels as a retracement. He anticipates a bull run target of 40,000, 45,000 Nifty but acknowledges the need for market corrections and sectoral rotations. Gupta says: “Our base case scenario is 18,500, 18,700 levels. We see that particular level as an ideal level to buy into the market for the next round of bull run.”

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Subodh Gupta, VP (Technicals & Quants) – Institutional Desk, PhillipCapital India, says the correction is needed for Nifty to come down to 18,500, 18,750 levels which is nothing but 23% retracement of the entire rally which we have seen in the market in the past 10 years. That is our base case scenario – 18,500, 18,700 levels. We see that particular level as an ideal level to buy into the market for the next round of bull run. Gupta says use 18,500 levels, to buy into the markets for an upside target for next three to four years of 40,000, 45,000 Nifty.

Parts of your note actually took everybody by surprise. Only when we read the entire note did we realise that actually you are balancing it out but the point which you talk about, the worst case scenario with Nifty closer to 16,000 shook everybody. Tell us what is the hypothesis? How much probability are you assigning to that kind of a scenario because we are in the middle of a corrective phase.

Subodh Gupta: Let me start from the very beginning. Way back in 2020, we had highlighted in our report the mother of bull run that the Nifty from here is expected to head towards 22,000 to 24,000. And in all our correspondences from there on, we have highlighted that this is the mother of bull run and this bull run will continue till 22,000 to 24,000 levels and Nifty went on to go on to make 22,500 levels.


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We would like to reiterate that the mother of bull run continues. If you are looking for a four to five years perspective, you will be able to see Nifty heading towards 40,000-45,000 levels. Right now, on an immediate basis, we see oscillators being highly overbought and a correction is needed on an immediate basis. The correction is needed for Nifty to come down to 18,500, 18,750 levels which is nothing but 23% retracement of the entire rally which we have seen in the market in the past 10 years.

So, that is our base case scenario – 18,500, 18,700 levels. We see that particular level as an ideal level to buy into the market for the next round of bull run. I would like to draw an analogy. We have seen the same type of correction in the market in the quarter ending December, March and June 2021-2022. But that particular correction was a side-based correction. Here we are expecting some deeper correction where 18,500, 18,700 might play upon in the markets in coming days.

So, this is what our base case scenario is in the markets. Use 18,500 levels, to buy into the markets for an upside target for next three to four years of 40,000, 45,000 Nifty. So, this is what my view is on the market on an immediate basis.

We really respect your thoughts that in the near term you have to work purely on levels and resistance and corrective phases do occur, but in this four-year view which you are talking about, which could be the stocks or sectors that could lead or participate in this move of doubling of index in the next four-five years?

Subodh Gupta: I am sorry I would not be able to speak anything about sectors and stocks. But I would like to say one thing. It is not just one single sector or one single stock that will participate. There will be a huge amount of sectoral rotations to take the market up. I mean a single stock or a single sector does not have that much punch to take the market on top. So, the sectors and the stocks will keep on changing, but overall the holistic scenario of the market if you look at the longer time frame of the high overbought nature of the market on technical charts.

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Download The Economic Times News App to get Daily Market Updates & Live Business News.

Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

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