Union Budget 2021 optimism and healthy foreign fund inflows have pushed the Indian share market benchmarks to fresh highs. BSE Sensex hit the crucial 51,000-mark, while the Nifty 50 index climbed to a lifetime high of 15,000 in the intraday deals on Friday. The 30-share index took over three months to climb from 40,000 to 50,000. It added another 1,000 points in just 10 days, hitting a high of 51,073.27. Since the Union Budget 2021 earlier this week, the share markets have surged over 5 per cent. On Thursday, the market capitalisation of BSE-listed companies crossed the historic Rs 200 lakh crore mark for the first time. Investors are looking for cues to figure if the benchmark indices would still keep rising. Technical analysts feel that Nifty will find some resistance at 15,000 level.
Nifty resistance at 15,000
In the afternoon deals, Nifty 50 climbed off the record high level and was ruling below 14950 level. Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder of Gemstone Equity Research & Advisory Services, told Financial Express Online that because of two reasons Nifty may find some resistance at 15k. “One, we have had a parabolic runup of over nearly 1400-points one way, beginning the day of Union Budget. Secondly, often, from the market participants’ psychology point of view, we do tend to get selling pressures at round figures,” he said. The present week also has a maximum Call OI accumulation at 15,000 level, Vaishnav said this will continue to act as resistance for the coming days. However, the month-end options figures show maximum call OI at 15300.
Keep booking profits at regular intervals
Crossing the 15000 price point was a mere psychological formality, says Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments. He believes that markets will now be scaling higher to 15200 and then 15500. Seeing a strong bullish tone, Hathiramani advises investors to hold positions, and also keep booking profits at regular intervals, which is a prudent way of riding the trend.
Markets have staged a smart recovery in the last 3-4 days and are now trading at all-time high levels. Rajesh Palviya, Head – Technical & Derivatives Research, Axis Securities Ltd, finds the overall structure of the markets in the bullish zone. Palviya told Financial Express Online that the derivative data suggests that the 15000-15100 range is likely to act as resistance zone in near term. Once Nifty manages to cross above 15100 it may scale up towards 15350-15500 in the short term. “However on the lower side 14800-14700 are important support zone for any minor corrective action in the near term,” he said.
Should investors buy, sell or hold?
Vaishnav believes that markets will now enter a broad consolidation phase. There may not be any major downsides, but the consolidation range will be wider as markets go on from here. Incremental upsides, if any, will be limited from now on. While Hathiramani advises traders to not jump into fresh positions. He suggested a buy on dips strategy. There is ample scope for the markets to correct during intra day sessions. Hathiramani says that these dips can be utilised to make fresh long positions for higher targets. This way the risk-reward trade-off would be favourable.
If Nifty breaks below 14700, Rajesh Palviya feels that this may lead to further profit booking or long liquidation which could take Nifty 50 index towards 14500 level.