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Analyst Somesh View - Closing Comments Jan 08

2021-01-08 18:57:29

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Nifty formed a bullish candle on the daily as well as weekly chart as the closing was higher than the opening level. index gained 2.3 percent for the week.

Nifty opened strong at 14258 and maintained an upward rally to touch a new high of 14367. Index climbed 209.90 points, or 1.48 percent, to end at a record closing high of 14347. I feel if the current momentum sustains, Nifty can go beyond 14500 in the coming sessions.

Nifty opened higher and gradually extended gains to close above the 14300 mark for the first time. Auto, IT, pharma and select banking & financials and FMCG stocks led the rally. Positive global cues amid economic recovery hopes also supported the rally.

We are witnessing a reversal in the dollar index, while political stability in the US and the probability of a further fiscal stimulus package has pushed the long-term US yields higher.

Moreover, there is a possibility that the Fed may reduce its bond-buying plan towards the end of this year, which could further push US yields higher and consequently hurt the rupee.

Bulls continued their relentless strength after a brief pause of the two sessions to hit yet another milestone with first-ever close above 14300 level. In this process, strength in the markets continued for 10th week without any meaningful correction, from the lows of 11557 level which makes the bulls vulnerable for a sudden and sharp falls.

Traders to trail and fit their stop losses from time to time to the previous sessions low. According to that, in the next trading session, if the Nifty sustains above 14221, then it can head towards its next destination of 14500 level.

However, if it breaks 14221, then some weakness may emerge that can initially pull down the index towards 14000 level.

Traders with a high risk appetite should go long by making use of intraday dip towards 14250 level, with a stop below 14200 and look for a modest target placed in the 14450/14518.

Midcap and Smallcap indices closed 1.01 percent and 0.72 percent higher, respectively.