After The Bell: Sensex zooms 975 points, what should investors do on Monday?

Market Outlook

Indian shares bounced back sharply on May 21 after falling for two consecutive days. The S&P BSE Sensex rallied by nearly 1,000 points to post best daily gains since March 30, while the Nifty50 closed above 15,150, which is a positive sign.

The Sensex closed 975 points higher at 50,540, while the Nifty50 rose 269 points to close at 15,175. The BSE midcap index rose 0.8 percent and the smallcap index closed with gains of 0.65 percent.

The market recorded its biggest weekly gain since the budget week. The S&P BSE Sensex rose 4 percent, while the Nifty gained 3.4 percent for the week ended May 21.

“Domestic equities witnessed strong rebound after being lacklustre for two days following weak global market. The easing Covid concerns, appreciation in the rupee and recent positive global data helped the market,” Vinod Nair, Head of Research at Geojit Financial Services said.

“The volatility index is reducing gauging outperformance to continue. All sectors were in positive territory with financial stocks leading the rally supported by strong Q4 results of largest PSUB SBI and RBI’s Central Board meeting,” he added.

Sectorally, the buying momentum was visible in banks, financials, telecom, power, utilities, oil & gas as well as realty stocks.

“Banking stocks gain ahead of SBI Quarter 4 results today. Beaten down real estate stocks are witnessing fresh buying today on account of soft interest rate and hope of re-opening lockdown,” Mohit Nigam, Head, PMS, Hem Securities said.

“Oil marketing companies like HPCL, BPCL reacted positively as Brent Crude fell to nearly $ 65 a barrel after sliding more than 6 percent over the past three sessions,” he added.

Here’s what experts think that investors should do on Monday, May 24:

Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services Limited

Technically, the Nifty formed a strong bullish candle on the daily and weekly scale while forming a higher top-higher bottom from the last three weeks.

Now, it has to hold above 15,050 to witness an up move towards 15,300 then life-time high of 15,431. On the downside, support exists at 15,000 and 14,900.

Rohit Singre, Senior Technical Analyst, LKP Securities

The index opened the day with a good gap and managed to hold its bullish stream throughout the day and gave a bullish flag sort of breakout on the daily chart, which hints bullish momentum can extend further.

The Nifty formed a bullish candle on the weekly chart, and 15,100-15,000 will act as a strong hurdle.

If the index manages to sustain above this level, it may head towards its previous swing high. Overall, the immediate hurdle is near 15,250-15,350 zone.

Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments

The index successfully closed above 15,150 and should heading higher to 15,300 as the next pit stop. Support continues to be at 14,700 and this will get upgraded on May 23. As long as this holds, the index will be in a bullish terrain and can continue buying dips for higher targets.

Sumeet Bagadia, Executive Director, Choice Broking

Technically, the Nifty has given the breakout of its falling trendline as well as the upper band of Bollinger formation, which points to strength in the counter.

The index has formed a Bullish Marabozu candle on the weekly chart, which indicates upside movement in upcoming sessions.

The Stochastic oscillator & MACD also suggested positive crossover on the daily time frame, adding strength to the counter. The Nifty is holding support at 15,000, while an upside resistance seems at 15,300.

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