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After The Bell: Sensex scales Mount 49k, what should investors do on Tuesday?

The benchmark index is heading towards the short-term target of 14,600, beyond which 15,000 will be the next major target. On the downside, 14,300-14,250 will act as a key support zone, say experts.

January 11, 2021 / 05:17 PM IST

What a start to the week! The S&P BSE Sensex zoomed past 49,000 for the first time to hit 49,303, while the Nifty50 found a new high of 14,498.

Both the benchmark indices ended the day at new highs, with the Sensex up 486 points at 49,269 and the Nifty50 gaining 137 points to 14,484.

While the benchmarks rallied around 1 percent each, small and midcaps close in the red. The S&P BSE midcap index fell 0.08 percent, while the S&P BSE smallcap index closed with losses of 0.17 percent.

TCS, Tata Motors, Infosys, Bajaj Auto, HDFC Ltd, Asian Paints, HCL Technologies, and M&M were among the more than 400 stocks on the BSE to their fresh 52-week high.

Strong Asian markets, robust December quarter earnings from TCS and the rollout of the coronavirus vaccination drive from January 16 boosted sentiment, experts said.

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"Improved outlook for third quarter earnings along with strong global cues helped the Sensex breach the 49,000-mark. The rally in the market was led by the IT sector backed by firm earnings results, however, small and midcap stocks were under pressure,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

Hopes of a new US stimulus to be unveiled this week created an upbeat movement in Wall Street, while profit booking was seen in the European markets, he said. The rally was being fueled by strong Q3 earnings preview, foreign fund inflow and optimism around Union Budget 2021, Nair said.

Here is what experts think that investors should do on January 12:

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

The market closed at the highest point of the day despite weakness in US stock futures, the rise in the dollar index and crude prices at an alarming level of $55.

It seems that the market has gained momentum expecting bold announcements in the Union Budget. Technically, the market has left an exhaustion gap between the day's lows and highs of January 8.

It is an indecisive candlestick pattern at the top of the current movement and traders should take some profit at current levels until the Nifty/Sensex cross 14,520 and 49,370, respectively. Support exists at 14,440 and 49,000 and 14,380 and 48,900. One should be careful when adding long positions at high level.

Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas

Continuing the positive momentum from the previous week, the Nifty opened gap up on January 11. An intraday dip towards 14,400 induced bulls for another round of buying. As a result, the index recovered & made a higher high towards the end of the session.

On the way up, the Nifty crossed a rising trendline on the daily chart drawn from the crucial swing highs. This shows that the bulls have an upper hand.

The benchmark index is heading towards the short-term target of 14,600, beyond which 15,000 will be the next major target. On the downside, 14300-14,250 will act as a key support zone

Rohit Singre, Senior Technical Analyst at LKP Securities.

The index opened the day with a gap and managed to hold the bullish stream and closed the day near a good hurdle zone of 14,500 with gains of nearly one percent, forming a dragonfly kind of Doji candle pattern on the daily chart.

The index shifted its support to the 14,400-14,300 zone. If it manages to hold the level, we may see the index march towards the 14,550-14,600 zone, which is an immediate hurdle on the higher side.

Ajit Mishra, VP - Research, Religare Broking Ltd

The anticipation of a better-than-expected earnings season, coupled with supportive global cues, aided the upbeat start. Going forward, stock-specific volatility would remain high as earnings season would gain pace.

Further, key macro data like CPI, WPI, and IIP would also be tracked by investors. We reiterate our positive yet cautious stance on markets and advise aligning positions according to the prevailing trend.

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.
first published: Jan 11, 2021 05:17 pm

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