The Indian market turned volatile on November 23 as the Nifty50 tested 5-Day EMA placed at 12,851 and then bounced back to hit a fresh high of 12,968.85. The S&P BSE Sensex reclaimed 44000 to scale 44,271.15, a new record.
The indices, however, closed off the days high. The Sensex rose 194 points to close at 44,077 while the Nifty50 ended 67 points higher at 12,926.
Sectorally, the action was seen in IT, oil & gas, energy, healthcare while some selling pressure was seen in telecom, banks and consumer durables.
“The Nifty 50 index managed to make a new high at 12968.85 on the back of the rise in frontline defensive stocks in the technology, pharmaceutical and FMCG sectors. However, the Nifty 50 index needs a decisive break-out above the 12,970 to trade comfortably above the 13,000 levels,” Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities told Moneycontrol.
Weakness in financial stocks could derail the momentum in the market. The strategy should be to trade long if the Nifty 50 index crosses 12,970 for the target of 13,100 and 13,180 levels, he said.
Chouhan added that below 12,800, the index would fall to 12,600 levels. The focus should be on building material stocks.
Here is what experts think that investors should do on November 24:
Ashis Biswas, Head, Technical Research, CapitalVia Global Research Limited
The market continues to witness a lack of momentum and stayed in the 12,750-12,950 range. The short-term technical condition of the market appears like a sideways correction is in the process.
While it is subject to further price action evolution, our research suggests it is prudent to wait for a decisive breakout above 13,040 and technical factors to improve before going long in the market.
As such we retain our cautious stance and advise traders to refrain from building a fresh buying position until we see further improvement and breakout above 13,040.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas.
The Nifty had a gap up opening on November 23 but it couldn't build on early gains. After a dip in the first half, the index recovered in the second half and went on to cross the swing high of 12,963.
The index, however, couldn't sustain in the higher territory. On the higher side, the key psychological level of 13,000 continued to play a crucial role as a barrier.
The price action over the last few sessions shows that the Nifty is stuck in the 13,000-12,700 range and can take a dip towards 12,800 before going higher. On the higher side, 13,350 will be the short-term target to watch out for.
Vinod Nair, Head of Research at Geojit Financial Services
The RBI’s proposal to allow large and well-managed NBFCs to be converted into banks and to raise promoters’ stake in private banks to 26 percent was taken as a positive by private banks, NBFCs and new banks.
Generally, banking stocks are re-rating, assuming a revamp in credit growth and a fall in NPAs going forward. Further, a positive update on the vaccine over the weekend, reinforced hopes of a faster economic recovery next year. Domestic markets gained from global peers, which was mainly reflected in IT and pharma sectors.
Sumeet Bagadia, Executive Director at Choice Broking
After opening on a positive note, the Nifty traded between 12,800 and 12,950 in a range-bound session. As positivity couldn’t last long, a correction was seen in the benchmark index.
Some recovery was seen due to the IT and pharma sectors while Reliance Industries also helped the Nifty gain momentum. The Nifty has support at 12,800 while upside resistance comes at 13,000.
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