NSE Nifty will continue bullish momentum towards 15500, says Motilal Oswal

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services says that Nifty index opened gap up, made a new life time high of 15431 but later ended on flat note led by profit booking. Nifty/Sensex fell marginally by 1/50 points to close at 15313 / 52,104. The broader market however, ended in green with Nifty Midcap 100/ Nifty Smallcap 100 up +0.4%/+0.1%.

Sectorally it was a mixed bag with Metals being the biggest gainer up +2.9%, followed by Energy (+2.3%) and PSU Banks (+1.7%). Infra gained +1.1% while Pharma and Realty were up by +0.5%/+0.3%. On the other hand, IT was the biggest laggard down -1.5%, followed by Private Banks, Financials, FMCG and Media which were down 0.3% to 0.8%.
 

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Global cues were positive on optimism over the rapid rollout of Covid-19 vaccines and hopes for much bigger new US fiscal aid from the new government. On the domestic side, Nifty ended marginally lower as investors booked profits at higher levels amid a mixed trend in global markets. Metal stocks were the biggest outperformers in today's session and surged to a 2-year high on account of recovery in demand as countries emerge from the pandemic.

State-run banks were the other outperformers after the Government shortlisted 4 banks for potential privatization. ICICI Bank, Axis Bank, Eicher Motors, Nestle and Infosys were among major losers on the Nifty, while gainers included Power Grid, ONGC, Hindalco, Tata Steel and NTPC. Technically, Nifty has to hold above 15200 to continue its bullish momentum towards 15500 while major support exists at 15100-15000 zones.
 
Going ahead, the market could continue with its positive momentum given optimism over Covid-19 vaccines rollout, quicker economic recovery and hopes for further US fiscal stimulus. With earnings season largely over and no major event ahead, global cues will largely dictate the short term market trend. While the investors should adopt buy on dips strategy, traders should be cautious with stock specific action given sharp rally in recent times.

Sharekhan says on the daily chart, the Nifty is above the 20-day moving average (DMA) and the 40-DEMA, of 14681 and 14391, respectively. The momentum indicator is bullish on the daily chart. On the hourly chart, the Nifty is above the 20-hour moving average (HMA) and the 40-HEMA, of 15279 and 15192, respectively. The hourly momentum indicator is bearish. Market breadth was negative with 829 advances and 1056 declines on the National Stock Exchange.