One may expect Nifty to move up and retest the swing high of 11,340 levels in the near term. Daily 14 period RSI is placed at the edge of 60. Its sustainable move above 60 could mean more upside for the market ahead.
Gold continues to glitter as the yellow metal scaled fresh record highs on August 5 while equity markets witnessed profit booking at higher levels. India Gold surpassed Rs 55000 per 10 gm market, and experts feel that if the momentum continues we could see the rally extend towards Rs 65000 per 10 gm in the next 12-15 months.
Gold and Silver have been best performing assets so far this year with 40 percent and 50 percent returns, respectively, so far this year.
“An aggressive stance of central banks to push unprecedented amounts of liquidity and keeping interest rates lower coupled with reignited trade-war concerns and rising COVID-19 infections provide a convincing fundamental backdrop for continuation up-trend in both precious metals,” Kishore Narne, Head - Commodity & Currency, Motilal Oswal Financial Services said.
“We continue to be bullish on Gold with potential targets between Rs 65,000 to 68,000 /10gms and Silver expected to reach anywhere between Rs 82,000-88,000 over the next 12-15 month period, we continue to recommend investors to keep a higher allocation towards Gold and use every dip to accumulate the metal,” he said.
Indian market ended mixed on Wednesday as investors prefer to book profits at higher levels and uncertainty around the outcome of the RBI policy meeting capped the upside.
Let’s look at the final tally on D-Street on Wednesday – the S&P BSE Sensex fell 24 points to 37,663 while the Nifty50 rose 6 points to close at 11,101.
“Markets ended almost flat amid volatility as participants preferred to book some profit at higher levels. Initially, firm global cues led an upbeat start, and follow up buying in the select index majors pushed the index higher in the early trades,” Ajit Mishra, VP - Research, Religare Broking Ltd told Moneycontrol.
“However, caution ahead of the RBI meeting outcome triggered profit-taking as the day progressed, which eliminated all the gains. Consequently, the Nifty ended flat at 11,100 levels (up by 6 points),” he said.
A mixed trend was witnessed amongst the sectors wherein metals, auto, and consumer durables were the top gainers while energy and power were laggards. Interestingly, the broader markets managed to end with decent gains in the range of 0.4-0.9 percent respectively.
We have collated views of experts on what investors should do on August 6 when the market resumes trading:
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities
We remain positive and expect uptrend to continue above 10900 and 11500-11600 on the higher side. Only if the index retreats to 10900, it would negate the short term positivity thus opening gates for 10700 on the downside.
Banking and Capital goods are in the accumulation zone and expected to gain momentum; Midcap space is expected to consolidate.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas
The pullback that started on August 4 got stretched beyond the 61.8% retracement of the previous fall. As it attempted to approach the 78.6% retracement mark, the index faced steep selling pressure.
Consequently, the Nifty dipped into the negative territory & ultimately posted a marginal positive close. Structurally, the next move down looks around the corner, which will push the Nifty below the swing low of 10882. On the other hand, today's high of 11225 will act as a key resistance
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
Nifty50 appears to be on a pause mode as it has given up almost 1 percent of the gains from intraday high of 11225 levels before signing off the session with an indecisive Spinning Top kind of formation.
Hence, in the next trading session, it is critical for this counter to sustain above 11064 levels to retain positive bias. In case if it slips below the said levels then it can attract selling pressure on an intraday basis with targets between 11013 – 10950 levels.
In that scenario sideways consolidation can be expected as long as Nifty sustains above 10900 levels. However, the trend will not decisively change in favour of bears unless Nifty closes below its 200-Day simple moving average whose value is present around 10855 levels.
Contrary to this strength shall resume on a strong close above 11225 levels which can then facilitate Nifty to eventually test recent swing high of 11341 levels. For time being traders are advised to remain neutral on the index by adopting a stock-specific approach.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Wednesday’s high volatility in the market has not damaged the positive sentiment created on Wednesday, as the short term trend remains up and a sustainable move above 11200-225 levels could open the next upside levels of 11350.
The positive chart pattern of higher highs and lows continued in the market and the last sessions swing low of 10882 could be considered as a higher bottom of the sequence.
As per this pattern, one may expect Nifty to move up and retest the swing high of 11340 levels in the near term. Daily 14 period RSI is placed at the edge of 60. Its sustainable move above 60 could mean more upside for the market ahead.
The short term trend of Nifty continues to be positive. The volatility is expected to continue for the next session (RBI's policy announcement). The outcome of this event is likely to ignite a sharp intraday movement on either side.
One may hold long positions with the stop loss of 10900 levels and a sustainable move above 11200-11225 levels is expected to pull Nifty towards 11350 in the near term.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.