Technical experts feel that the trend favours consolidation in the near term, but bulls should be able to push the index towards record highs in the next few weeks.
The Nifty50 which flirted with 12,000 levels earlier in the month of November soon got hit by selling pressure at higher levels as mixed global cues, and muted macro numbers weighed on investor sentiment.
After giving a Golden Crossover on daily charts on 8 November, Nifty50 started consolidating in a narrow range. MACD gave a bearish crossover around 11 November which signifies consolidation or a small blip in the momentum.
But, technical experts feel that the trend favours consolidation in the near term, but bulls should be able to push the index towards record highs in the next few weeks. The pause is healthy and investors who missed the rally could now get into the markets on every dip.
“The markets ended almost unchanged amid volatility, in continuation of the prevailing consolidation phase that we are seeing in the market. Indications are in the favour of further consolidation and we expect the Nifty50 to hover within 11,700-12,100 range in the coming week,” Ajit Mishra, Vice President, Religare Broking told Moneycontrol.
“Having said that, we feel it is a healthy pause after the recent surge and the overall trend would remain positive. Besides, the buoyancy in the banking index is pointing towards a strong possibility of the Nifty50 testing a new high in weeks to come,” he said.
The Nifty50 closed the week on a muted note without giving any indications of the trend. The index was down 0.1 percent for the week ended November 15.
Technically speaking, nothing much has changed from the previous week. The only additional observation would be the intra-week decline towards the psychological level of 11,800, which coincided with the '89-EMA' on an hourly chart, suggest experts.
“The index is on the recovery path now and looking at the sheer outperformance from the banking space this week, we expect the Nifty to head towards 11950 – 12034 soon. In fact, if similar traction continues in marquee banking names, we will not be surprised to see index clocking record highs soon,” Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel Broking told Moneycontrol.
“Thus, the bias remains positive and one should stick to a ‘Buy on decline’ strategy. As far as support levels are concerned, this week’s low of 11802 followed by 11750 is likely to act as a sheet anchor for the forthcoming week,” he said.
Chavan further added that some of the other sectoral indices that attracted traders’ attention towards the fag end were the Pharma, Metal, and Auto. Do watch out on these baskets which are likely to provide better trading opportunities.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Are you happy with your current monthly income? Do you know you can double it without working extra hours or asking for a raise? Rahul Shah, one of the India's leading expert on wealth building, has created a strategy which makes it possible... in just a short few years. You can know his secrets in his FREE video series airing between 12th to 17th December. You can reserve your free seat here.