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After The Bell: Profit booking hits D-Street; here’s what investors should do on Thursday

Nifty has to hold above 14,400 zones to witness a fresh move towards 14,750 then 15,000 zones while on the downside major support exists at 14,300 and 14,200 levels.

January 13, 2021 / 04:47 PM IST

Dalal Street witnessed profit booking on Wednesday after benchmark indices hit fresh record highs in the early trade. The S&P BSE Sensex inched closer towards Rs 50,000 while the Nifty50 rose above 14,600 for the first time to hit a high of 14,653.

Let’s look at the final tally on D-Street - The S&P BSE Sensex recouped losses and closed 25 points lower at 49,492 while the Nifty50 index closed flat at 14,564.

Sectorally, the action was seen in the public sector, telecom, auto, and oil & gas while consumer durables, healthcare, finance, and energy counters witnessed profit booking.

On the broader markets front – the S&P BSE Mid-cap index was down 0.6 percent while the S&P BSE Small-cap index fell 0.3 percent.

"Following positive global cues and ease in inflation for the month of December, the market opened with good gains. However, profit-booking was triggered due to 1.9% contraction in factory output, premium valuations, and concern over the upcoming union budget, knocking down all the gains,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

Close

Here is what experts think that investors should do on January 13:

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities

We are of the view that the bulls are still in total control but the daily chart showing a temporary pause near 14,650/49,700, hence, traders may prefer caution near the resistance level.

Technically, the index still maintains a higher high and higher low series. However, on the daily chart, the Nifty/ Sensex has formed Hammer candlestick reversal formation which suggests a high chance of quick intraday correction.

Correction cannot be ruled out if Nifty/Sensex trades below 14,435/49,100. Below 14,435/49,100 correction is likely to continue up to 14,400-14,300. /49,000-48,650.

On the other hand, 14,650/49,700 would be the immediate hurdle for the bulls, above the same, the index could rally till 14,700-14,735/49,850-50,000.

Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas.

The Nifty witnessed a volatile session on January 13. It had a gap-up opening but couldn't build upon the early gains. The selling pressure intensified as the day progressed and the index moved down to test Tuesday's low of 14,432.

The bulls rushed in over there and pushed the index to positive territory. Ultimately the index posted a marginal positive close on the daily chart. The price action for the day shows that the index can get into a brief consolidation before heading higher.

The consolidation can take place near 14,400-14,600 and once today's high of 14,653 is crossed then the Nifty will be set for an extension to 15,000.

Rohit Singre, Senior Technical Analyst at LKP Securities

The index opened a day with gap-up but after making a high index witnessed profit booking and closed a day with mild loss at 14,556 forming a hanging man sort of candle pattern on the daily chart.

The index has formed a good base near 14,500-14,430 zone any break below said levels can emerge in more profit booking so longs can use said levels as there trail stop loss level; strong hurdle zone is formed near 14,650-14,700 zone where one can start booking profits.

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

Nifty formed a Bearish Belt Hold sort of candle on a daily scale with the long lower shadow which indicates that declines were being bought and the overall bullish undertone is intact. It continued the formation of higher highs from the last fifteen trading sessions.

Now it has to continue to hold above 14,400 zones to witness a fresh move towards 14,750 then 15,000 zones while on the downside major support exists at 14,300 and 14,200 levels.

Ashis Bisas, Head of Technical Research at CapitalVia Global Research Limited

The market failed to show resilience to stay above the level of 14,600 and we saw profit booking in the market. As of now, the short-term technical condition of the market shows that the expected range of the market is likely to be between 14,380 and 14,680.

While it is subject to further price action evolution, our research suggests it is prudent to wait for a decisive breakout above 14,680 and technical factors to improve before going long in the market.

As such we retain our cautious stance and advise the traders to refrain from building a fresh buying position until we see further improvement and breakout above 14,680.

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.
Kshitij Anand is the Editor Markets at Moneycontrol.

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