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Atul Suri explains why the recent market surge looks like a short-covering phase rather than a confirmed bull market. He discusses how leadership will only become clear in the next stage, with financials, pharma, and autos emerging as early areas of strength.
And we have Atul Suri, CEO of Marathon Trent here with us in the studio.So, thank you both Yash and Rajna for joining in.
Atul, it's looking so much nicer.You're smiling.
Uh, you know, we were just chatting with Romesh Mani and he said that this is a he gets a sense that this is a structural change and the beginning of a bull market in the markets.Do you agree?
Fingers crossed as I see it.Uh, I think we're in the first stage.This is a typical short covering phase.Okay.If you look at the speed of the rally, I mean the percentage move 8% in a week for a index, you have to go back in time.Also, if you look at the characteristics, right, you'll find that all the stocks that were at 52- week lows are the ones actually that have driven.
The rally started actually last month.Look at the IT index, the worst performing index.
You had a sharp move last month.
Absolute blinder, but there was no follow-up.
Yeah, it plateaued.
Yes.In fact, it's been underperforming last week.
It did.
Then Reliance.When did you see Reliance move so much
post that next day?Nothing.After that, there's no move.Private sector banks, the big few have moved.
Let's see how long it goes on.So, this is typical of a short covering rally.
So, you're not convinced of
No, I'm not.It's not I'm not saying I'm not convinced.I hope fingers crossed.I'm very bullish.I have very bullish targets.It's just that the characteristics are the first stage which is a short covering.post short covering then actually we will really see where strength emerges
and that's where the sectors and stocks will emerge.Right now everything is a surprise.
Yeah.
Like Reliance that day was a surprise.What has happened?So what happens is that wherever the short positions are highest the moves are higher.Yes.
And that is why stocks from 52- week lows are the ones that have bounced and all leadership has actually corrected.However, as I said that for me or for most investors, these are they look good on screen but it doesn't translate into portfolios.What translates into portfolios is the second stage.In the second stage, you really start looking for sectors that are outperforming, stocks that are outperforming.Simply what is making new 52- week high earlier than the rest of the market and that's when actually the big money is made.So this is a surprise.Last week if we were sitting here the mood would have been different.
Yeah, indeed.
So I I think that this is a short covering phase.typically the characteristics are visible on the screen
at at this point when we're done with phase one and we're unsure whether phase two will happen or no what is the advice is it time to take an aggressive equity call or you don't even know who theleaders are going to be who going to make this so what do you do
so I feel that as I said we have been bullish on markets and it's been a long painful wait it's been a big time correction not a price correction but a time correction of almost two two and ahalf years what you really look for Ima is sectors and stocks which are making new heights.What breaks out early where the leadership is so for me if you ask me at this point the thing that I am most bullish about and it can change is financials
I'm not talking about the large banks but I'm talking about a lot of financials look at some of the capital market stocks so you'll really find that this sector continues to strengthen
okay
then if you look at another sector which I find which has been the first sector to break out is pharma so you find leadership in pharma and you see the way farmer stocks are moving another sector which Ifind very interesting linked to crude correcting hopefully fingers crossed is autos you see the auto numbers that have come the kind of moves that have happened so that's what I am really looking at the fact is that youcan't bet on these one day moves
you can't it's so you only come to know after it's happened it's too late right
the fact is that you have to really think about something bigger and I personally have been very bullish on the nifty I I I mean I had a target of 30,800 and I've been saying it for a yearand people like have disbelief and laughter and I guess guess that when that happens you feel more confident because when people do not believe and I'm one of those who really strongly believes but I think in that movewe are in the first stage of the short covering yet the discovery of sectors and stocks is to happen and for me that is really what's important because that's what's where you can make money you can navigate youcan get in you can have a large allocation right now it's it's a blinder I mean who ever thought look at the way the index is moving so it surprised all of us but I think that leadership that
emerges in this phase is ultimately going to be where the big wealth is created.
The discussion turns to how quickly sentiment and global flows can change when markets start outperforming. Suri defends his 30,800 Nifty target and argues that India’s relative strength can keep attracting momentum-driven money.
All right.Uh always a pleasure having you Adul in the studio and thanks a lot for joining in.You know as you said uh the last week while we've seen a big short covering bounce in fact we had a fund manager who was with us you know I won't name him but he said Nigel y aretalking about this big rally but up portfolio hasn't moved much actually because it's been led by these large cap names.However, he made a very good point about sentiment.He said there are a couple of large investors that sit in the Middle East right
and they were you know higgling haggling whether to put that 8000 crores or not.He said in the last week someday phone said allocate the money that's the way the sentiment has turned you know that the markets are suddenly coming into their own said I could put the 80 crores two months aheadnow they want to put it immediately you know so the flows are gradually coming back
that that definitely changes the index is a headline number and it affects sentiment it affects emotion and that's a great starting pointdeed
and this as I said is the first stage is a more of a short covering rally I think the second stage would emerge post a bit of a corrective phase and I feel that's where the more interesting themore bigger sustainable and profitable moves
and even foreign investors right they would look at the portfolio and they say oh well last month India has done very well we've outperformed the rest of the markets and we're you know we don't have enough allocation overhere we've so they are underperforming because of l lack of allocation and that starts the cycle of getting money in
you see the global rankings you'll realize in one week's move we have suddenly become the best performing on one week one month three month
suddenly we're being talked about right like why do we not have why do you not have enough allocation
absolutely and and man chases moment um okay whatever one may say if you look at global inflows you realize that
ultimate momentum chasers
you may give some great intellectual reason you may give a 10ear story Amrit Khal's story but at the end of the day it all goes out in one week the perception changes and we can see so ultimately momentumbegets momentum it begets flows and hopefully fingers crossed
absolutely you know and let's hope that that 30,800 target that you're talking about hopefully it's sooner rather than later let me ask you this you know what's the probability you think say in the next 18 months once weget to that target.The reason I ask you is someone would say you're talking about a 20% rise on the nifty from now.But if I dated back, it'll be actually in October 2024 when we chatted, we were at around this 26,000 odd mark.So actually lower.So over the longer term, actually it wouldn't be such a big surprise.Do you think next 18 months we could probably get to that 30,000 mark?
I think so.I I think so because you know Nigel in being in these markets for many years, markets have stopped surprising me.
Surprises have stopped surprising me.Two years ago when we were sitting here I track lot of around 40 global markets.2024 mid India was the best performing equity market in the world.We were better than the U better than NASDAQ on one-year basis and you know which was at the 40th number Korea.
Oh everything's turned
and two years the whole thing flipped right now everyone was talking about Cosby right everyone was wanted to be in these.Is anyone looking at the index right now?What's happened?
It has tears of blood if you are an investor in those markets.
Same thing happened to gold and silver last year.Everywhere I went, people would ask me my opinion on gold and silver.Nobody's talking about it.So markets have a way of surprising.So what happened last week has not surprised me.And I feel that going ahead, I still remain very optimistic and bullish about India.I still hold my target of 30,800 in spite of all the difficult phases.I held that last week.I hold this yeah
this week.Last year probably nobody believed the people laughed at me.Maybe they're not laughing at me this time.Fingers crossed.
Suri gives his view on precious metals, saying gold is entering a consolidative phase and is better suited for allocation than short-term trading. He also notes silver’s higher volatility and suggests gold may remain range-bound for months.
Let's get the question on precious metals out of the way.You know people uh they look at the market and they say market is down you know but gold if I look at it the way that asset ran away
and if I compare it in rupee terms last summer to this one in fact it is up I think only around 10%.after the kind of correction that we've seen
in dollar terms I think it's not moved too much what is your view on both these two gold and silver from here on what are the levels you're looking at
so I think Nigel they're making a basing formation you know gold also if you look at it as an asset class it has phases it has these blinder six month phases when there's massive global uncertainty and that happensquickly by the time people realize that the move is over we saw that last year gold can go into a consolidative phase so I feel that this is a great consolidative phase Gold is not the perfect place totrade because when you know the trade has happened, it's a bit too late.But I think grow gold
has emerged as an allocation play.Most people have understood asset allocation across and this two years of none equity returns have given people a reality check.So I feel that this is a great place for gold to consolidate.Yeah, it may move around a wee bit, but I don't think it's taking off big time.So if you're looking for an allocation play rather than chase it like how people were chasing it a year ago.
Yeah.
I think this is a great time to allocate to growth
for the allocation play
and silver just a minute.Let's get the
I think silver is also a bit of a proxy but it's definitely more volatile if
not for the faint-hearted.
Not for the faint-hearted.The the kind of beta that you have in silver is is tremendous.So it's it's it's something for a very sharp trader.But if you're looking at an allocation play, I think gold is forming a basing formation.It's a great place to allocate.But yeah, if you think you're going to make money next week, I don't think that's the answer.
So on gold, you know, if you look at the historical track record, it goes through very long periods periods of consolidation and then it makes an up move and then again it goes into a PE.So are we at the beginning of a long period of consolidation?
So I I think so that you know we are going to see a long period of consolidation.
This could be a couple of years also possibly.
I would say a few months.Yeah, it's difficult to say years but few months.rema but I think that you know as I'm trying to tell you that what the sentiment was last year versus this year how markets flip how sentiment changes and I think this is a time nobody wants to lookat it but I think this is a great time to accumulate if you have an allocation thought as far as gold goes
The conversation shifts to specific sector ideas, especially capital markets, AMC-related businesses, NBFCs, and autos. Suri also highlights pharma as a secular uptrend and midcap IT as a contrarian opportunity with higher risk-reward.
any niche ideas in the midcap small caps that you can share with
so Natul asked you that question correct me if I'm wrong but I think PTM was the big pick last year
yeah PTM was
congratulations on that one
PTM it it had it had a late it had a great swing and I think I think I mean in this sort of market you know to pick something and did well in the last year it's been achallenging year so congratulations on that call but Remma saying she wants more so tell us
so stocks is again so I think I will talk about sectors which is really more sensible
but more niche sector don't give a broad like financial
no no I think capital markets if you look at the capital market
is that wealth the exchanges AMC's
I think I think some of these places which are AMC's and the composite play I think there are quite a few of them but I think they are doing extremely well AMC's
and and you know the interesting part is that we are all shocked with the SIP flows.We are shocked with domestic two two and a half years of no returns.Everyone thought Indian investors are fools and FIS are smart.I dare say in 3 months the Indian investor will be the smart and the FI will look like a fool because they will have sold at a certain level and the market will be substantially higher and the wholeSIP money has accumulated in all this 20 22 23 24,000 and hopefully at the nifty year 26 they will all be fairly in the money.So I feel that that's a tsunami and fortunately we are part of that
yes
space the fin you know the whole financial play that is so I'm very bullish on that area I think financials also NBFC's per per se are I think doing great I find one sector as I mentioned autos autoshas been also the numbers that are coming out are fantastic
but two wheelers CV tractors are going through a bit of a rough
the rural side is
yeah so two wheelers four-wheelers are you looking at on ancillaries with an export
I I I think I think the two wheelers are definitely doing very very well.Certain select ancillaries and even four-wheelers.I think that diesel is a very big area and you'll find that some of the diesel plays
I won't take names but there are three four of them.I think that they also look very very interesting because globally where if if diesel kind of you know cools off or corrects there's going to be a bit of a play.They've taken a bit of a hit but I feel that's going to be a very very interesting play.I think that sector that is actually in a secular up move is pharma.Pharma
pharma is the first sector to have actually made lifetime highs well before the market has and you'll see some of the pharma stocks doing very very well very smooth so if you ask me for a long-term trending spaceI think farmer's doing well and if you want to take a contrarian bet absolutely you know not not typical I feel it can surprise
okay
because somehow I don't agree in this anti-AI trade but somehow this is a sector that's beaten blue
and maybe that we are not in the early phases we are not the LLMs etc which only China and US are but later on when it comes to implementation when it gets to the last mile I do thinkthat some midcap IT stocks can surprise and even if you look at your screen with the index had a bit of a recovery but there are some midcap IT stocks that are doing very very well so I dothink that as a contrarian play if you want to take down something beaten uh little bit of a higher riskreward I think it some of the midcap IT stocks are very very interesting
The interview wraps up with thanks, Diwali wishes, and a brief sign-off. The hosts then tease the next segment with more trading ideas from additional guests.
okay all right Uh well Adul it's always a pleasure hearing your thoughts.Thanks a lot for joining us giving us your view on the markets and we also enjoy pre the interview where you give us some health tips as well which are very very important.I wish
and 15 years he's been coming to our studio on Mahura trading so that is a tradition there's a lot of work that goes into that look as well every evening 5 to 7
you know are you know up and about but wishing you the family a happy Diwali and
same to all of you all of you and all your viewers.
Well I'll tell you what on that note we'll just take a short break.If you come back uh we'll be joined by Mitesh as well as Deepan Meta will be joining in for some trading ideas.