The surge in coronavirus infections, an acrimonious buildup to US elections and geopolitical reasons will keep volatility high that can act as a spoilsport, say experts.
Overall, Nifty can trade in a range of 20 DMA standing around 11,350 mark and 200 DMA placed near 10,800 levels for the coming week.
The geopolitical concerns between India-China and global market volatility would continue to weigh on markets in the immediate term.
Neeraj Chadawar of Axis Securities believes that the equity will continue to trade on higher multiples for some more time.
While the market has rallied smartly, the rally has been highly concentrated with the top 15 stocks contributing over 70 percent of the returns.
Infosys fired almost on all cylinders in June quarter earnings, which gave confidence to investors and as a result six out of 10 fund houses raised exposure to the stock last month.
India's stock market remains one of the most promising emerging markets of the world with tremendous growth potential as several structural reforms initiated by the Narendra Modi-led government assures that tomorrow belongs to India.
In muted earnings expectations for Q1FY21, beats were much higher than misses and that was one of major reasons and confidence booster for equity market not only in India but globally.
Given that India will remain a growth market in the long-term one cannot neglect growth stocks for a prolonged period of time, Jyoti Roy advised.
The June quarter results are in line with expectations and we have not witnessed any major negative price reaction post the numbers.
MACD has given a positive crossover with its average near-equilibrium level of zero on the weekly chart suggests positive bias to continue in mid-term as well.
Interventions by governments and central banks have prevented the economic situation from deteriorating significantly but it is unlikely that the recovery will be a V-shaped one, say experts.
On the upside, the Nifty needs to sustain 10,800 for the uptrend to continue towards 11,100 and then possibly 11,350.
The market's valuations have turned higher than long-period average and investors should be cautious and selective in picking stocks, say experts .
The Nifty50 and the Sensex have rallied 41 percent from the lows of March 23, with leading sectors gaining 32-55 percent during the period.
Axis Securities added ITC and CCL products in its list of top picks as it sees value buying and small cap allocation increasing, while the brokerage dropped Aarti Industries and Escorts from its list.
SBI's economists say the surge in equity markets is not linked to economic recovery and maybe a sign of irrational exuberance.
As fundamentals will take time to turn positive, investors should stick to quality largecaps rather than midcaps or smallcaps.
A CNBC-TV18 report indicated that the country's second largest private sector lender may be planning to raise around $3 billion
"ICICI Bank's valuations are attractive at current levels and it is among our top picks in sector," Jefferies said.
Now Nifty would face a strong hurdle at 10,500-10,550 zone as the 200-days exponential moving average is placed on daily charts.
Macquarie believes worries about large-scale retail defaults are exaggerated.
Largecaps or sector leaders are the safest bet during a crisis because the recovery momentum generally reflects first in these stocks, say experts.
Aashish Somaiyaa of Motilal Oswal Asset Management Company advised that one should avoid panic and remain invested.
Experts point out the broader structure of the market continues to remain weak as Nifty is making a lower top and lower bottom formation.