If Nifty sustains above the 12030, we could expect further uptrend till 12150-12300 levels. Contra traders can take a long bet between the level of 11810 to 11750, with a strict 11700 support stop loss.
Absolute display of strength by the bulls on Tuesday as benchmark indices recouped losses and closed in the green towards the close of the trade. The S&P BSE Sensex rose more than 30 points while the Nifty50 closed above 11900 levels.
Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 31 points to 40,625 while the Nifty50 closed with marginal gains of 3.5 points to 11,934.
Sectorally, the action was seen in Energy, IT, power, and metal stocks while profit-taking was visible in healthcare, consumer durables, and finance stocks.
Benchmark Nifty witnessed a narrow range activity near the 12000 levels. After a weak opening, the index remained sluggish and hovered in the range of 11890-11985.
“Technically, post strong uptrend rally, Nifty has formed Hammer formation followed by inside body candle pattern near the 12000 levels, indicating high chances of a minor correction if the index trades below 11895,” Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities told Moneycontrol.
“For the trend following traders, 11895 should be the sacrosanct level. Trading below the same, we can expect intraday correction waves up to 11810-11750 levels. On the flip side, 12030 would be an immediate hurdle for the bulls,” he said.
Chouhan is of the view that if Nifty sustains above the same, we could expect further uptrend till 12150-12300 levels. Contra traders can take a long bet between the level of 11810 to 11750, with a strict 11700 support stop loss.
Here is what experts have to say on what investors should do on October 14:
Arjun Mahajan, Head - Institutional Business at Reliance Securities
The Nifty ended flat despite selling pressure was seen across the sectoral indices barring IT and Metals. IT stocks continued to get momentum ahead of crucial 2Q results and better earnings visibility.
News of production cut and a price increase by Chinese steel manufacturers led select metal stocks to move higher. Additionally, improved prospects of demand and pricing resulted in cement stocks to get decent traction.
Ajit Mishra, VP - Research, Religare Broking Ltd
Markets remained range-bound for the second day in a row and ended almost unchanged. Mixed global cues and weak macroeconomic data was weighing on the sentiments. After the initial up move, the benchmark gradually inched lower however buying interest in select index majors capped the damage. Consequently, the Nifty index settled on a flat note at 11,935 levels.
We feel it’s a healthy pause and suggest using further dip to create fresh longs in the index. Nifty has immediate support at 11,800.
Stocks, on the other hand, are witnessing erratic swings but it’s not new during the earnings season. Traders should plan their trades accordingly and prefer large-cap over others.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The uptrend of the last 7-8 sessions is intact and the consolidation movement of the last couple of sessions could be considered as a corrective move of the said uptrend.
This signal a lack of selling participation at the swing highs, post sharp upmove. A similar consolidation pattern was formed in past during the later part of Sept (29-30 Sept) and eventually resulted in an uptrend continuation pattern.
The short-term trend of Nifty seems to be taking a breather by moving in a range. The near term uptrend status of the market remains intact.
The market is expected to resume its uptrend after the consolidation movement in the next 1-2 sessions. The upside target is intact around 12150-12250 levels. Immediate support is placed at 11850.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd
Nifty has to hold above 11850 zones to witness an up move towards 12000-12200 zones while the support exists at 11750 levels.
Going ahead IT would remain in focus post strong results by TCS and Wipro and upcoming results of Infosys (Wednesday), Mindtree (Thursday), and HCL Tech (Friday).
The market would also keen an eye on the Supreme Court which has rescheduled the hearing on the loan moratorium case to October 14.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.