Nifty continues record run; what investors should do on Wednesday

Benchmark equity indices continued to surge higher shrugging off concerns on rising inflation, tracking optimism from global peers. Nifty managed to hit the crucial 15,900 level intraday to claim the new record high and inched closer to 16K level. In fact, market continued its winning streak for the fourth consecutive session with Sensex and Nifty ending at record highs. On Tuesday, Sensex closed at 52,773.05, up 221.52 points or 0.42%, while Nifty ended 57.40 points or 0.36% higher at 15,869.30.

Nifty Bank gained 297 points to close at 35,248. Broader markets supported the rally with the Nifty Midcap100 and Nifty Smallcap100 indices closing over half a percent higher each.

Among sectors, gains were seen in private banks, financials, FMCG, realty and IT stocks, while Nifty Pharma and Nifty Metal indices ended in the red. Shares of non-bank lenders were in demand as investors liked what they saw in the Reserve Bank of India’s discussion paper on rules for the microfinance sector.

On the Nifty50 index, Asian Paints, HDFC Life, Axis Bank, ICICI Bank and HUL were the top gainers, while Divi’s Laboratories, Adani Ports, Coal India, Tata Motors and Bajaj Finserv led the losses.

Here’s what experts say investors should do on Wednesday

Shrikant Chouhan, EVP, Equity Technical Research, Kotak Securities

The market is trading at the highest point of the current up move and we are witnessing mixed reaction in the market. The stock-specific activity is increasing day by day, which is an indication of a “cautiously optimistic” approach from the traders. As the market has closed above the level of 15,850/52,750, we could see indices breaching the levels of 16,050/53,300 in the near term. Supports for the market exists at 15,800/52,600 and at 15,750/52,300. The strategy should be to buy indices only on dips. The Bank-Nifty is heading towards the level of 35,700 and corporate facing banks should do well.

Ajit Mishra, VP – Research, Religare Broking

Markets edged marginally higher in a range-bound session, taking cues from stable global indices. After the initial uptick, the benchmark hovered in a narrow band however movement on the stock-specific front kept the participants busy till the end. Nifty has been trading in an uptrend channel on the intraday chart and currently hovering around the upper band of the same. We’re seeing an early sign of a rebound in the banking index which could trigger a further surge. Traders should continue their focus on the selection of stocks and avoid contrarian bets.

Manish Shah, Founder, www.Niftytriggers.com

Nifty saw a positive close for the day and the pattern in play was a small bodied candle which is a Doji. By itself Doji has little relevance. The market gapped open for the day and remained at elevated levels through the day. Nifty moves along in a well-developed channel and currently it trades above the resistance at 15750 points. The channel points out towards targets of 16000-16100 over next several days. The question is if we will hit 16000 before the end of the current expiry. International equity markets have a bullish undertone and the overall trend in Nifty is up.

Bank Nifty has also started to look up so most likely Nifty should end higher than today’s close. We can expect to show a steady bullish undertone towards 16000 over next couple of days.