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After The Bell: Terrific Tuesday, here’s what investors should do on Wednesday

If the Nifty trades below 11,723 in the next session, then weakness shall be expected. If the index sustains above 11,535, then one can retain bullish stance and look to create long positions.

November 03, 2020 / 05:56 PM IST

The bulls remained in control of D-Street for the second day in a row on November 3, pushing the benchmark indices above crucial resistance levels. The S&P BSE Sensex reclaimed 40,000 while the Nifty50 closed above 11,800.

The Sensex rose 503 points to close at 40,261 while the Nifty50 rallied 144 points to 11,813.

Sectorally, action was seen in banks, finance, metals, auto while profit booking was seen in realty, energy, telecom, and oil & gas stocks.

Experts are of the view the Nifty50 is still vulnerable to high volatility due to the outcome of the US election. Hence, for the bulls to remain in control, the index has to hold above 11,535.

Close

The bulls appear to have put up a brave face, as markets across the globe chose to rally heading into the US elections with a positive mindset, and the Nifty50 was no exception, signing off the session with a decent bullish candle.

“The index managed a decisive close above its near term hurdle of 11,750 levels, it should ideally head towards 11,922 levels in next session. However, there seems to be strong resistance around 12000 levels and hence unless the Nifty closes above the stiff resistance of 12k a sustainable upmove shall not be expected,” Mazhar Mohammad, Chief Strategist—Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“Meanwhile, the Nifty may remain vulnerable for high volatility, along with global markets, owing to US Election which is capable of influencing the near-term trend in either of the directions,” he said.

IndexPricesChangeChange%
Sensex60,048.47163.11 +0.27%
Nifty 5017,853.2030.25 +0.17%
Nifty Bank37,830.3058.60 +0.16%
Nifty 50 17,853.20 30.25 (0.17%)
Fri, Sep 24, 2021
Biggest GainerPricesChangeChange%
Asian Paints3,448.60127.95 +3.85%
Biggest LoserPricesChangeChange%
Tata Steel1,272.10-46.60 -3.53%
Best SectorPricesChangeChange%
No Best Sector details available.
Worst SectorPricesChangeChange%
No Worst Sector details available.

If the Nifty trades below 11,723 in the next session, then weakness shall be expected, and if the index sustains above 11,535 then one can retain a bullish stance and look to create long positions, Mohammad said.

Considering the event ahead of us, he advised traders to remain neutral in the next session and in case if someone is already long, then they should book profits above 11,900.

Here is what experts say on what investors should do on November 4:

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

The Indian market rose after a massive surge in the US stock futures and unusual strength in European and Asian markets. The Nifty 50 climbed 1.24 percent to close at 11,813.


The Bank Nifty surged by 3.17 percent for the second consecutive day to end at 25,682. The Nifty has broken the trading range of the last three days at 11,750 and hit the resistance of 20 days SMA, which is at 11,825.
On November 4, we could see the Indian market being volatile, ahead of the US exit polls on that would drive the sentiment of the market.


Buying is advisable if the Nifty comes back to 11,750-11,700 levels, with a final stop loss at 11,650. On the higher side, 11,900-11,950 would be the resistance zone, where one needs to book profits on long positions. 

Ruchit Jain, Senior Analyst-Technical and Derivatives, Angel Broking

In the last three sessions, the Nifty has oscillated within a range but it surpassed its immediate hurdle of 11,750 in opening ticks. The Bank Nifty, too, opened gap up and it continued its mesmerising move to lead the benchmark higher.

As far as the Nifty levels are concerned, the immediate supports for the index for the coming session are placed around 11,745 and 11,670 whereas resistances are seen around 11,930 and 1,1970.

Due to the event, there may be some higher volatility and hence, traders are advised to follow proper money management techniques and avoid taking undue risks.

Till the above mentioned short-term supports are intact, one should avoid contra trades and look for opportunities in direction of the primary trend.

Arjun Yash Mahajan, Head - Institutional Business at Reliance Securities

Indian equities witnessed a sharp rally, mainly led by strong global cues, which was caused by expectations of a large fiscal stimulus with national polls in the US predicting a Democratic sweep in the presidential election.

Additionally, positive economic data in domestic markets with regards to strong manufacturing PMI for October 2020 and strong 2Q corporate earnings bolstered investors’ confidence in domestic equities. Baring realty, all sectoral indices ended in the green, with financials once again led broader market rally.

The market is expected to be volatile due to likely ambiguity over the US election in the US and continued rise in Covid-19 cases in various European nations and the United States.

Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas

The Nifty, for the last few sessions, was forming a base near multiple support parameters. In terms of the levels, 11500-11600 acted as a crucial support zone. Thereon, the index has taken a leap on the upside.

The overall structure shows that the index is set to resume the larger uptrend. From a short-term perspective, the index is heading towards 12,000-12,025, which is the junction of the upper channel line, October high and the daily upper Bollinger Band. Once that gets taken out, the index will be set for a significant upside.

Sumeet Bagadia, Executive Director at Choice Broking

With the help of large counters like PVT & PSU banks and finance sector, the Nifty managed to close above 11,800 after giving a positive opening on the back of the Asian market and SGX Nifty.

Technically, the benchmark index has been trading between 11,500 and 12,000 since the last many days and it seems that it may continue further unless and until we get either side breakout.

The Nifty has taken the support of its 50-day moving average which shows a positive trend for the time being. At the present level, the Nifty has strong support at 11,700 to 11,550 while upside resistance comes at 11,900-12,050 level.

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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