Will Nifty 50 follow its peer Sensex in hitting a new lifetime high this week?
The current month has been fruitful for Indian markets with Sensex hitting a fresh historic high and Nifty 50 clocking a new 52-week high. The 50-scrip benchmark is currently above the 18,500 mark and has recorded a nearly 3% upside so far in November. Unlike Sensex, its counterpart Nifty 50 is currently a little over 90 points away from hitting its all-time high of 18,604. Last week, domestic equities tracked positive Asian peers as they cheered the FOMC minutes which hinted towards a less hawkish approach in the coming policies. This led dollar to slide down, yields to decline and hence gaining traction in the equities. In the coming week, the trend in Nifty 50 is seen to be positive.
On Friday, Nifty 50 extended its rally for the fourth consecutive day and even touched a new 52-week high of 18,534.90 during the day. However, the benchmark closed at 18,512.75 up by 28.65 points or 0.15%. In the broader basket, the midcap and smallcap indexes witnessed an upside of about 1% each. While in terms of sectoral indices, media stocks outperformed, while auto, realty, and oil & gas added substantial gains. Heavyweights such as RIL, HDFC Life, Tata Motors, Hero MotoCorp, and Coal India were top performers. Broadly, the markets were on a positive note.
During the week ending November 25th, Nifty 50 rose by more than 1%.
Meanwhile, Sensex ended at 62,293.64 up by 20.96 points or 0.03% on Friday. But before that, the 30-scrip benchmark touched a new all-time high of 62,447.73 on the day driven by broad-based buying sentiment.
Rupak De, Senior Technical Analyst at LKP Securities said, “On the daily chart, the Nifty has reached the rising trend line found by joining the preceding peaks. The momentum indicator has reached the falling trendline on the daily timeframe.”
According to Apurva Sheth, Head of Market Perspectives, Samco Securities, the NIFTY50 on the daily chart is trading in a higher high higher bottom formation and the extended up move in the prices indicates a strong bullish trend. In the recent minor throwback, prices have taken support near their 21-day exponential moving average and an instant rebound was seen post that.
Sheth stated that now the rule of polarity will be applied in NIFTY where prior resistance will act as immediate support for the market. He added, the momentum oscillator RSI (14) on the daily chart has formed a bullish hidden divergence 55 -60 levels, and post that index started to move higher with further strength.
So does Nifty 50 have the potential to hit its all-time level this week?
On the technical ground, Samco’s expert believes that the support for the Index is placed near 18250 and any move below the same will extend the fall till 18100 levels. Similarly, on the higher side, 18650 will be the immediate resistance followed by 18800 levels.
On the other hand, LKP Securities technical analyst said that based on the price chart and momentum indicator setup we can infer that the index is on the verge of strong directional movement over the short term.
On the lower end, Rupak De said, “a fall below 18,450 may trigger a correction towards 18,100-18,000; whereas, on the higher end, a rise above 18,605 may induce a decent rally in the market.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.