Further upsides to Nifty likely near-term

The market ended higher with both the Sensex and Nifty closed at record highs for the third straight day.

The Sensex ended 66 points higher at 39,749 while the Nifty ended marginally higher at 11,928 on the back of buying in heavyweights like RIL, Infosys, Coal India and TCS.

The NSE witnessed a large turnover of Rs 53,000 crore due to rebalancing of the MSCI Index effective from Wednesday.

Broad market indices like the BSE Small Cap Index gained more, thereby outperforming Sensex and Nifty, while the market breadth was positive.

Sectorally, the top gainers were the BSE IT, Metals, Oil & Gas and Power indices. The top losers were the BSE Telecom, Capital Goods and Auto indices.

According to analysts, while the market has ended flat, the underlying trend remains up. Further upsides are likely in the near-term once the immediate resistance of 11959 is taken out. Crucial supports to watch for resumption of weakness are 11865-11812.

Technical View

Analysts said there were no major triggers on the global as well domestic fronts and hence, so the market had a flat to positive start a tad above the 11950-mark.

“Since we are approaching May series expiry, the psychological figures are going to play a vital role and here, 12000 becomes the centre of attraction. In our sense, we are going to challenge this in the next couple of days and somehow writers are going to get intimidated. Whether we close above this expiry or not is very difficult to predict. But mind you, sooner or later we are likely to surpass this and march towards next important junction of 12200. For the coming session, 11864–11812 would be seen as key support levels,” said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking. According to analysts, the Nifty showed range movement today and closed the day on a flat note. A small negative candle was formed today with long lower shadow.

“Technically, this pattern signals a consolidation at the highs after a smart upside bounce in the last couple of sessions. The overall trend remains positive, the Nifty could face resistance around 12050 levels and any downward correction from the highs is unlikely to damage the near-term uptrend status of the market,” said Nagaraj Shetti-Technical Research Analyst, HDFC Securities.

Market View

“Better liquidity from FIIs and MFs will maintain a positive sentiment in the domestic market given de-escalation in political risk and focus over upcoming reforms, to revive growth. Global market has been bit volatile recently, in spite India will do well due to diversion of foreign funds to emerging markets like India,” said Vinod Nair, Head of Research, Geojit Financial Services.