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After The Bell: Market logs gains for 4th consecutive session; what should investors do on Thursday?

Volatility may remain high due to mixed global cues and earnings season.

October 21, 2020 / 05:47 PM IST

Supported by gains in shares of banking and financial heavyweights, the key equity indices Sensex and Nifty ended the day in the green, extending the winning streak into the fourth consecutive session.

The Sensex ended at 40,707.31, with a gain of 163 points or 0.40 percent, while Nifty settled 41 points, or 0.34 percent higher at 11,937.65.

The BSE midcap index ended 0.23 percent higher but the smallcap index erased most gains to settle 0.03 percent up.

Among the sectoral indices, BSE realty surged 4.39 percent while telecom and metal rose 2.52 percent and 2.26 percent, respectively.

"Indices managed to close in the green but not without their share of hiccups over rumours on waiver of interest on loans. Banks and metals provided support even as we saw profit-booking in several stocks during afternoon trade. Select PSU names were sought after by funds in today's volatile session," said S Ranganathan, Head of Research at LKP Securities.

Here is what experts have to say on what investors should do on October 22:

Vinod Nair, Head of Research at Geojit Financial Services

The market is maintaining its confidence due to a turnaround in earnings growth based on ongoing Q2 results.

IndexPricesChangeChange%
Sensex62,868.50-415.69 -0.66%
Nifty 5018,696.10-116.40 -0.62%
Nifty Bank43,103.75-156.90 -0.36%
Nifty 50 18,696.10 -116.40 (-0.62%)
Fri, Dec 02, 2022
Biggest GainerPricesChangeChange%
Apollo Hospital4,871.4595.75 +2.00%
Biggest LoserPricesChangeChange%
Eicher Motors3,331.85-105.60 -3.07%
Best SectorPricesChangeChange%
Nifty Midcap 10032566.80283.00 +0.88%
Worst SectorPricesChangeChange%
Nifty Auto13046.35-145.45 -1.10%

To date, the results are good while any weakness or shortfall in the future will impact the market going forward. Western markets are trading in the negative due to decreasing optimism over the US stimulus.

We expect the market to remain volatile in the near future as it has digested a lot about the results and as we near the US election date.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities

Today's market action signals high volatility and the key overhead resistance at 12,025 levels, but the market has not been showing any sustainable weakness from the overhead resistance.

The emergence of fine intraday upside recovery of Wednesday from the lows could bring some hopes for bulls to move up further.

The short-term trend of Nifty is positive with high volatility. There is a possibility of the retest of upper resistance levels (12,025) again, before showing any intraday weakness from the highs.

Broader range movement could be expected around 12,050-11,800 levels in the next 1-2 sessions.

Ajit Mishra, VP - Research, Religare Broking

Markets managed to end in the green in a highly volatile session. We expect volatility to remain high due to mixed global cues and earnings season.

The Nifty has been hovering in the 11,650-12,050 range and needs a decisive break for a further surge.

Traders should limit their leveraged positions and maintain positions on both sides.

Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services

The Nifty formed a Dragonfly Doji kind of candle on the daily scale with a long lower shadow, indicating declines are being bought.

It continued its winning streak for the fourth consecutive session and managed to recover a big bearish candle made on October 15.

Price and data setup suggest a bounce may be seen but multiple hurdles and supply pressure at higher zones could restrict the upside momentum with higher volatility.

The Nifty has to hold above the 11,800-11,820 zone to witness an upmove towards 12,100 while on the downside, key support exists at the 11,777-11,750 zone.

Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities

The sentiment and momentum of the markets are positively biased. The broad range is seen at 11,540 and 12,140.

We advise buying on dips with participation expected to be broad-based. Since we are nearing a period of the significant market impacting news, we expect volatility to be high and advise using corrections to accumulate.

Currently, metals, realty and auto look attractive for the medium-term while banking and IT can be traded for shorter periods.

S Hariharan, Head-Sales Trading, Emkay Global Financial Services

A breakout in LME copper and CRB Metals index has heralded strength in the NSE metals index as well.

Ferrous names (JSW Steel, Jindal Steel & Power and Tata Steel) displayed much greater relative strength within the metals universe.

The other notable mover over the last week has been the Bank Nifty. After breaking out above resistance at 23,000, the support level has been tested twice and held, giving confirmation of the uptrend.

Midcaps and banks appear poised to outperform the Nifty, as over-positioning in Reliance and IT names gets corrected.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

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.
Nishant Kumar
first published: Oct 21, 2020 05:26 pm