After historic week for markets, what should investors do on Monday?

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Last week was historic for the Indian markets as the Sensex and the Nifty50 rose to record high levels. The Indian benchmark indices continued to bounce and ended on a positive note for the fourth consecutive week.

Nifty50 ended the week with a gain of 0.82%. It managed to close at a fresh all-time high and above the key resistance zone of 15,780 after having claimed the 15,835 mark for the first time. The S&P BSE Sensex went on to mark its incremental fresh lifetime high of 52,641 and ended at a closing high of 52,474 on June 11.

Following a brief scare mid-week on concerns of rising inflation and subsequent corrective action taken by the central banks, Indian markets climbed the wall of worries to clock in all time highs.

Broader markets continue to outperform the headline indices as both midcap and smallcap indices added 2.9% to their tally in the week gone by. This outperformance in the broader market space was led by strong buying activity in the utilities & power stocks followed by healthcare and IT stocks.

Going forward, the market will first react to April’s industrial output data. The markets will closely watch the outcome of the two-day US Federal Reserve meeting on June 16.

CPI and WPI inflation for the month of May will be released on Monday, while Balance of Trade data for May will be announced on Tuesday. The primary market will get buzzing again as four IPOs – Shyam Metalics, Sona Comstar, Dodla Dairy and KIMS Hospitals are set to hit street.

Here’s what experts say investors should do 

Manish Shah, Founder, www.Niftytriggers.com

Nifty closed the week with a gain. The highlight for the week was a strong bounce off the lows at 15550. Though Nifty has made a new swing high the rate or the momentum is seen on a slight decline. Though there are tell-tale signs of a decline nifty has seen consecutive long ranged candles for last four weeks and thus we could see a pause in the current rally.

If Nifty breaks below 15725-15700 expect a short term decline to 15600-15610. If the break above 15778 holds expect the rally to continue to 15950-16000. Any decline in Nifty could be short-lived and a drop to 15600-15610 should be used as a buying opportunity.

Overall, the market momentum is expected to continue albeit with some consolidation next week as the key indices gained 7.6% each in the last four straight weeks, and with the last leg of the March 2021 quarter earnings season, the stock specific action could continue

Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities

The Nifty and the Sensex will have strong support at 15,450/15,500 and 51,500 in the coming week.

On the upside, however, 16,000 and 53,000 and 16,150 and 53,500 seem to be gaining ground.

From next week, we need to change our buying strategy of buying on minor supports to buy only on large supports. Try buying around 15,550/15,450 and 51,500.

On the higher side, our advice is to take profit or reduce long positions between 15,950 and 16,050.

Ajit Mishra, VP-Research, Religare Broking

The market will first react to the IIP numbers in early trade on June 14. The progress of the vaccine drive and updates on the monsoon will be closely watched for cues.

While the trend is bullish, the underperformance of the banking pack is hurting the sentiment, however, the bias is likely to improve next week. Traders should focus on other sectors and use intermediate dips to add the selected stocks.