HDFC Securities says that Indian markets shot up on positive overnight cues from global markets. Investors cheered as a trial of a Covid-19 vaccine developed by Pfizer Inc. and BioNTech SE showed more than 90% effectiveness.
 
Markets had closed at all time highs yesterday and handsomely built on those gains in today’s session. Today was the seventh consecutive session where benchmark indices have closed in the green.  Banking stocks continued to outperform, as bank nifty made a massive 4% up move today.  
 
IT and Pharmaceuticals stocks corrected while stocks that have been beaten down by the severe disruption of the pandemic, such as those tied to travel and leisure, movie theaters, and theme parks, along with some retailers and restaurants led the markets higher.
 
Japan's Nikkei 225 rose to a new 29-year high.
 
The sharp trended up move continued in the market for the sixth consecutive sessions on Tuesday. Nifty closed strongly with gains of around 170 points. A reasonable positive candle was formed with lower shadow, which indicates an emergence of sharp buying on intraday dips.
 
After opening on an upside gap on Tuesday, Nifty showed intraday consolidation in the early part of the session and filled the upside gap completely. A sustained buying has emerged and the intraday dips of the mid to later part have been used as a buy on dips opportunity for the day.
 
The sharp trended up move continued in the market without any reasonable downside correction in between over the last 6 sessions. Though, Nifty placed at the new all time high of 12643 levels, still there is no indication of any reversal pattern yet at the highs, as per daily and intraday time frame chart. This is a positive indication and one may expect further upside in the market in the short term.
 
Daily RSI has moved above 70 and there is some room left for this indicator to top out and weekly RSI is now moving above 60 levels. This action of RSI could signal some more upside for the market ahead.
 
We observe a clear upside breakout as per weekly and monthly chart. The long term chart pattern on the monthly chart indicates further upside potential of 12800 for the Nifty in the near term. Hence, the last top was at 12430 and the next expected upside target would be around 12800 levels.
 
Conclusion: The short term trend of Nifty continues to be positive. There is no indication of any reversal pattern at the highs. The next upside levels to be watched around 12800 for the next few sessions. Immediate support is now placed at 12550.