HDFC Securities highlights that Indian benchmark equity indices ended at record closing level rising for the ninth consecutive session. The Nifty recovered sharply after falling in the morning and making a low at 11.05 am. At close, the Nifty was up 114.40 points or 0.8% at 14133.
 
Volumes on the NSE were higher than recent average and advance decline ratio was also very positive. Among sectors, Metals, IT, Auto, Pharma, PSU Bank rose the most, while Bank Nifty ended marginally in the negative. World stock markets hit record highs on Monday, the first trading day of the New Year, as investors hoped the rollout of vaccines would ultimately lift a global economy ruined by the COVID-19 pandemic. A possible tightening in virus rules for Tokyo pulled Japanese stocks off 30-year highs.
 

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A gauge of activity across India’s manufacturing sector remained steady even as employment fell for nine straight months. The IHS Markit India Manufacturing Purchasing Managers’ Index stood at 56.4 in December compared with 56.3 in November. Chinese factory activity continued to accelerate in December, though the PMI missed forecasts at 53. Japanese manufacturing stabilised for the first time in two years in December, while Taiwan picked up.
 
HDFC Securities says Nifty has closed at another record high with breadth of the markets improving even further. The post holiday upbeat mood should sustain for another 1-2 sessions. 14200 on the Nifty could be the near term target, while a breach of 13950 could raise some concerns.
 
The Nifty witnessed a volatile first half but found support at the key hourly moving averages. It closed at an all-time high of 14132.90. On the daily charts, we can observe that the sideways consolidation of the past four trading sessions has been breached on the upside. Prices are moving along the upper Bollinger band which is expanding, indicating that the positive momentum is likely to continue on the upside. The momentum indicator has a positive crossover which is a buy signal. Thus, both price and momentum indicators are pointing towards further upside and hence we maintain a positive stance on the Nifty for a short-term target of 14600. In term of levels, 14427- 14450 is the immediate hurdle, while 14034-13959 shall act as a crucial support zone.

 

Other technical observations on the daily chart, the Nifty is above the 20-day moving average (DMA) and the 40-DEMA, i.e. 13683 and 13267, 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, i.e. 14034 and 13959, respectively. The hourly momentum indicator is bullish. The market breadth was positive with 1361 advances and 580 declines on the National Stock Exchange.