After The Bell: Sensex, Nifty hit fresh highs, what should investors do on Friday?

July 15
18:02 2021

A terrific Thursday for D-Street as both the Sensex, and the Nifty50 registered a breakout above their previous record highs. The Nifty hit a high of 15,952, while the Sensex rose to a record of 53,266 on July 15.

Mild profit-booking was seen towards the close of the trade but experts feel that the trend remains to be on the upside.

The Sensex rose 254 points to 53,158, while the Nifty closed with gains of 70 points at 15,924. The BSE midcap index was up 0.3 percent, and the smallcap index closed with gains of 0.43 percent.

Positive global cues, smart rally in IT stocks after TCS and Infosys Q 1 numbers, comments from the US Federal Reserve and rally in banks pushed the benchmarks to record high.

“Indian indices extended their gains to all-time high supported by positive Asian market and rally in reality, IT, financials and metals stocks, in anticipation of robust Q1 earnings and recovery in demand,” Vinod Nair, Head of Research at Geojit Financial Services, said.

Asian markets were positive as China reported better than expected economic data and the global market was helped by the accommodative stance of the Fed, reducing the risk of change in rates, he said.

The Bank Nifty opened positive and surpassed its immediate hurdle of 35,800 and headed towards 36,000. The index closed 0.6 percent higher at 35,907.

Sectorally, buying was seen in realty, capital goods, IT, industrials and banks, while profit-taking was seen in oil & gas, telecom, public sector, and energy.

India VIX fell 2.54 percent from 12.59 to 12.27 levels. The decline in the VIX again gave stability to the market to commence the next move.

On the options front, the maximum Put OI is placed at 15,000 followed by 15,500 strikes, while the maximum Call OI is placed at 16,000 followed by 16,200 strikes. Options data suggests an immediate trading range between 15,700 and 16,000 then 16,200.

Here’s what experts suggest investors should do on July 16:

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

The Nifty moved in a consolidative manner during the second half of the day and closed with gains of 70 points. It formed a bullish candle on a daily scale and continued forming higher highs-higher lows for the fourth session in a row.

Now, the index has to hold above 15,900 to witness an up move towards 16,000 and 16,200, while on the downside, support exists at 15,800 and 15,750.

Ajit Mishra, VP-Research, Religare Broking Ltd

Favourable global cues combined with supportive domestic factors are helping the index to inch higher. Though the Nifty surpassed the hurdle of 15,900, it lacked decisiveness.

Nevertheless, we feel the recent resilience in banking would help the index to gradually inch higher hereon. Participants should continue with bullish bias and focus on identifying the right opportunities on dips.

Gaurav Ratnaparkhi, Head, Technical Research, Sharekhan by BNP Paribas

The Nifty posted a positive daily close for the fourth consecutive session. It recently broke out from a triangular pattern on the hourly chart and the follow-through continues on the upside.

The daily chart shows that sideways action over the last several sessions formed a sideways channel and the Nifty surpassed the upper end of the channel on July 15. After multiple failed attempts, the index managed to cross the key barrier of 15,900 on a closing basis.

Along with the price breakout, the daily momentum indicator has started a new cycle on the upside. The daily Bollinger Bands are also about to start expansion after a contraction phase.

All these observations suggest that the Nifty is set to head north. It is expected to surpass the 16,000-mark and head towards 16,400.

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

The Nifty has successfully closed above 15,915, which was a resistance level to watch out for. This should allow the index to scale further to 16,100. The revised support for the market is now at 15,700.

Keeping a close below this level as a stop, traders could consider long positions or an accumulation strategy on intraday dips.

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