Half of the analysts polled by Moneycontrol said that there are high chances of the Nifty hitting 12,000 if the actual results on May 23 also suggest a second term for Prime Minister Narender Modi
Nifty hit a record high of 11,883 in intraday trade on May 21 ahead of the election results on May 23. According to a poll conducted by Moneycontrol, Nifty is on track to hit 12,000 in May series if the momentum continues.
Half of the analysts polled by Moneycontrol said that there are high chances of the Nifty hitting 12,000 if the actual results on May 23 also suggest a second term for Prime Minister Narender Modi.
“If Nifty crosses the previous peak of 11,856 then we can expect it to rise further and test the 12,000 before May 23. For Nifty to cross 12,000, a strong single-party majority for the BJP is required,” Rusmik Oza, Head of Fundamental Research, Kotak Securities Ltd told Moneycontrol.
“If BJP-led coalition comes back to power on May 23 then expect broader participation of mid and smallcap as they are the most beaten down segment in the last 18 months,” he said.
But, given that the indices are trading in uncharted territory and a huge rally in the past three trading sessions, most of the impact of election results is already priced in. Now, there are higher chances of profit booking at higher levels, the rest of the polled analysts suggest.
"If the prediction of the exit polls turn out to be true and NDA gets a clear majority, the markets might see new all-time highs once again. That would be the best time to start booking profits on your longs while waiting for the right time to re-enter on dips," Amit Gupta, Co-Founder and CEO, TradingBells told Moneycontrol.
"Nifty can see going past 12,000 if NDA wins a clear majority, Sensex may touch 39,900-40,000. On the downside, 11,500 becomes the support (current 50-DMA) if the current exit poll results are sustained," he said.
Analysts are mixed when quizzed about what segment of the market will lead the rally. They suggest if Modi becomes the PM again, largecaps and select quality midcaps could do well.
“We expect a strong market rally in case we have a strong NDA or UPA government. However, we don’t rule out negative market reaction to a third front government backed by Congress. A strong NDA government can result in Nifty moving towards 13,000 during the course of a year,” said Sandip Raichura, CEO - Retail and Distribution, Prabhudas Lilladher.
“Economy is in a state of flux with liquidity being tight and presence of considerable pressure on NBFC, housing, power generation and telecom sectors. We believe that real pain in the economy will take time to subside and the market may remain skewed in favour of largecaps. We would advise being extremely selective in smallcaps at this point of time,” he said.
Nifty broke above its previous record high of 11,856 on May 21 to hit a record high 11,883. For bulls to remain in control, the index has to trade above 11,856 for the momentum to sustain.
Final results will dictate the near term trend for the markets. Traders who went long on the index should consider booking profits on their long positions, suggest experts.
“Usually after this kind of performance, normalcy should return to the markets and hence next two sessions can witness muted response as bulls may try to consolidate their gains with a sideways range,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“Hence, the fortunate traders who happened to be on the long side of the trade can consider booking profits by making use of strong opening in the next session. If the strength on Nifty50 exceeds beyond 11,856 on closing, then the rally should ideally get extended up to 12,100,” he said.
Poll participants:Sanjeev Jain, VP Equity Research at Sunness Capital India Pvt Ltd
Rusmik Oza, Head of Fundamental Research, Kotak Securities Ltd
Siddhartha Khemka, Head- Retail Research, MOFSL
Ritesh Ashar, Chief Strategy Officer, KIFS Trade Capital
Vijay Kuppa, Orowealth
Amit Gupta, Co-Founder and CEO, TradingBells
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
Chandan Taparia, Derivative & Technical Analyst at Motilal Oswal Securities Aditya Agarwala, Senior Manager, Technical Analysis, YES Securities
ICICI SecuritiesDisclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.