Mumbai: The market may enter into a consolidation mode even as the investors closely monitor the Fed stand on interest and global fund flows into the domestic market.
Analysts are seeing the Nifty to face strong resistance at 11,100 mark. Despite all Asian bourses correcting brutally on the last Friday, the markets managed to close above the crucial 11000 and many see it as strength in the market.
Nagaraj Shetti, Technical Analyst, HDFC securities, said, "The Nifty shifted into a consolidation near the 11K mark and closed on a slightly positive note. A small body negative candle has been formed at highs, with long lower shadow. This is indicating nervousness at the highs."
"The formation of long lower shadows in the last two sessions however indicating an emergence of buying interest at lows, but the Nifty is currently facing stiff resistance at 11,100 mark Further consolidation or higher level weakness is likely for the next session," he said.
Many analysts see the recent support levels of 10583 and 10585 as the base, with a higher trend line extended towards 11300 - 11350. Hence, a move towards this important junction cannot be ruled out in the days to come. Traders are advised to trade with a positive bias and expect 10994 - 10840 to act as a strong support zone now.
According to Angel Broking, barring IT and FMCG, all other sectors contributed in this rally and are poised for extended moves; providing credence to the up move.
"The Mid-Cap which has been oscillating within the boundaries of a 'Triangle' pattern since September, has finally confirmed its breakout and is set to continue the upward trajectory," Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking said.
Domestically, macros have improved in terms of lower inflation, possibility of further cut in interest rates by RBI, easing off of oil prices as well as expectations of healthy growth in profits for FY20. Globally, easing off of the US-China trade spat, FOMC stance on balance sheet normalisation, Brexit and oil prices will be deciding factors for market movement.
"We feel the froth and over valuation in the Mid-Cap space has come off sharply due to the underperformance vis-à-vis Nifty. We feel there is very high probability of Mid & Small Caps outperforming the Large Caps in CY19. For this...we need earnings recovery and a clear mandate at the Centre,” Teena Virmani, Vice-Presdient-Research, Kotak Securities, said.
Massive buying emerged in Small and Mid-Cap stocks which spilled over to Large-Caps, which indicates that green shoots of the bull market are slowly visible considering the movement upwards was very sharp and quick but nonetheless, swift profit booking and corrections are bound to occur going ahead, analysts said.
