Indian market went into a consolidation mode on January 15, a day after hitting fresh record highs, tracking the muted trend seen in other Asian markets. But, experts feel that the party is still on, and investors can go long on dips.
The consolidation in the market is largely external in nature as most of the Asian markets were trading with muted bias after comments from a top US official that tariffs on China would remain in place for now. The comments come ahead of the signing of an initial trade deal between the US and China.
The S&P BSE Sensex could rally past 42,000 ahead of the Budget and Nifty50 could inch towards 12,700 levels, suggest experts tracking the market.
The S&P BSE Sensex hit a fresh record high of 41,994 while the Nifty50 inched closer towards 12,400 on January 14 as it hit a record high of 12,374.
Broader markets are outperforming benchmark indices in the run-up to the Budget and the rally could continue in that space. But, with respect to benchmark indices, the upside is still intact as long as Nifty50 holds above 12,200-12,000 levels.
“Market may continue to show momentum and might push Nifty to as high as 12,650 and Sensex may go up to 43,100,” Gaurav Garg, Head of Research at CapitalVia Global Research Limited- Investment Advisor told Moneycontrol.
“With easing tensions between US and Iran along with the expected positive outcome of US-China Trade dispute in past months we are seeing a positive sign for the markets. Stable currency and lower crude prices will act as helping hand for the rally,” he said.
Any dips in the run-up to the Budget could be used as a buying opportunity. Experts feel that a sustained close above 12,350 could open doors for the index to climb 12,500 as well as 12,700 levels in the near term.
“Shorter-term events don't matter but upside looks like till 12550 in Feb whereas in March it may take to 12700. From April to July Midcaps likely to rally much more,” Pritam Deuskar, Fund Manager, Bonanza Portfolio Ltd told Moneycontrol.
In terms of technicals, Nifty is trading near an important supply zone of 12350-12400 levels, and if the index managed to hold onto 12200-12000 levels, chances of markets staging a strong bounce-back remain intact.
“If Nifty manages to take out this resistance zone 12350-12400 levels then we can expect a rally towards 12545/12700 levels in coming days while in the downside 12300 will act as an immediate support level; below this 20-DMA of 12205 will be next important support,” Santosh Meena, Senior Analyst, TradingBells told Moneycontrol.
Nandish Shah, Technical & Derivatives Analyst, HDFC Securities is of the view that 12,100 has emerged as strong support and unless that level is breached trend for the market would be considered bullish for the Nifty.
“Our advice would be to accumulate longs in the Nifty with the stop loss of 12,100 levels. The immediate resistance is seen in the vicinity of 12,370-12,430 levels, and any close above 12,400 could push Nifty towards the targets of 12,735,” he said.Disclaimer: The views and investment tips expressed by investment 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.