Stock market: Equity benchmark indices reached new highs on Thursday with gains of nearly 1 per cent on the back of optimism over India-US trade agreement, continued foreign investment and strong buying in IT stocks. Around 12:00 pm, Sensex was trading 772.75 points or 0.92 per cent higher at 85,199.09 and Nifty 50 was trading 217.45 points or 0.84 per cent higher at 26,084.60. Except Nifty Oil & Gas, all other sectoral indices are trading in the green. There is a strong rise in Nifty IT, Nifty Private Bank, Nifty FMCG, Nifty Metals, Nifty Auto and Nifty Pharma.
The path to 60,000 may open for Bank Nifty
In such a situation, while talking about the further movement of the market, Founder of ChartAnalytics and CMT, Technical Analyst, Forum Chheda said that Bank Nifty is performing better than Nifty 50. It recently achieved the target of a minor inverse head and shoulders pattern near 58,000 and touched a record of 58,261. In such a situation, the possibility of a short-term return towards 57,300-57,400 zone cannot be ruled out. At the same time, staying above this range can open the way for Bank Nifty towards 60,000.
Consolidation expected to continue in defense index
Nifty India Defense Index had made a double top near 9,159 in June before a corrective decline. In the phase of corrective decline, it got support around Rs 7,368. The index has since recovered well and is now consolidating near the 50% Fibonacci retracement of that decline. With RSI remaining neutral, a move above Rs 8455 would confirm fresh bullishness and could take the index back to its previous peak near Rs 9,159. Till then consolidation may continue.
Buying strategy will work if metal falls
Nifty Metal Index has recently crossed the important resistance zone of 10,100. This has confirmed a structural breakout. However, since then there has been a slight decline in the index. Yet it remains above the breakout level, reinforcing the bullish trend. Any further decline should be viewed as a dip buying opportunity. There is a possibility of a new round of bullishness in the metal when the next phase starts.
Many experts believe that going forward, midcap and smallcap stocks will outperform largecaps. Do you agree with this? In response to this, Forum Chheda said that although the largecap indices are leading the market’s rise till now, from the technical point of view the midcap indices now appear to be in a better position. It is moving towards coming out of its long-lasting consolidation phase, which may lead to relatively better performance in the coming sessions.
In contrast, small-cap stocks may continue to see selective, stock-specific action rather than widespread participation. Midcap shares may take over the reins of the bullish trend in the near future. Whereas in smallcap stocks, stock specific strategy will be seen working.
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