After witnessing about 1,000-point rally, Nifty50 could take a breather. The index started losing momentum the moment it touched 12,000-levels
It has been an exciting journey for investors since Sensex, Nifty touched their all-time low back in March. Since then it has been a one-way journey and that is on the upside.
After hitting a low of 7,500 in March, bulls helped Nifty to reclaim lost glory. Although it is still a bear market rally, but Nifty managed to reclaim 11,000 on July 20.
The Nifty50 rallied by about 1,000 points from 11,000 (hit on July 20) to 12,000 (touched intraday) on October 12.
During the same period, 5 stocks more than doubled investors wealth and 24 stocks rose 50-100%.
Stocks in the BSE500 index which more than doubled are Laurus Labs, IndiaMart InterMesh, Welspun India, Himatsingka Seide and Advanced Enzyme.
Note: The list is only for reference and not buy or sell ideas:
24 stocks that rose 50-100% include KPR Mills, Tata Elxsi, Sunteck Realty, IDFC, IFB Industries, Somany Ceramics and Adani Enterprises.
After witnessing about 1,000-point rally, Nifty50 could take a breather. We saw Nifty50 losing momentum the moment it touched 12000 levels on Monday.
Although the trend still remains to be on the upside some consolidation in the near term cannot be ruled out, suggest experts.
“After a swift rally of more than 1000 points, a mild pullback cannot be ruled out. Though the outlook on the market is still bullish and traders are suggested to keep a buy on dips approach,” Umesh Mehta, Head of Research, Samco Group told Moneycontrol.
“The immediate support and resistance levels to be watched in the short term are 10700 and 12020 respectively. Quarterly results will pick up the pace next week onwards after a strong earnings result by TCS this week,” he said.
Where is the Nifty headed?
The Nifty50 formed Doji kind of pattern on daily charts that suggest a loss of momentum. If Nifty50 fails to reclaim 12000 levels in the coming few session, chances of consolidation or profit taking will become more prominent.
The Nifty shifted into a consolidation with a narrow range movement on Monday. It closed higher with gains of 16 points. Technically, this pattern could be considered as a high wave type pattern which reflects high volatility in the market at the swing highs.
“The overall market breadth has been an area of concern for the benchmark Nifty over the last few sessions. The broad market indices like small-cap and large-cap have continued to show underperformance and continued with minor weakness on Monday, which has resulted in a negative advance-decline ratio,” Nagaraj Shetti, Technical Research Analyst, HDFC Securities told Moneycontrol.
“The Doji type confusing pattern of 8th Oct has also been nullified recently and Nifty close above it (11905). Hence, all these positive evidence could signal more upside for the market ahead,” he said.
Shetti further added that the underlying short term trend of Nifty continues to be positive. The present consolidation pattern could end soon and Nifty could resume its uptrend in the coming sessions. “The upside levels to be watched around 12250 for the next 3-4 sessions. Immediate support is placed at 11850,” he said.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.