Nifty hits 14k, ends 2020 just shy of the mark: Charts predict 14,800 in new year; check support, resistance

Following a volatile trade throughout the session, BSE Sensex and Nifty 50 ended the last day of the year 2020 on a flat note. Both the indices hit intraday record highs today. Sensex ended just 5 points up but clocked a record closing high of 47,751. On the other hand, Nifty 50 settled flat at 13,981.75, after crossing the crucial 14,000 during intraday for the first time ever. On a year-to-date (YTD) basis, Sensex jumped 16 per cent while Nifty managed to gain 15 per cent. Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst, Gemstone Equity Research & Advisory Services, told Financial Express Online, that 12450 and 12800 are key support levels for the Nifty 50 index in 2021, any slip below this will entail a reversal of the trend. With Nifty in uncharted territory, Vaishnav said that resistance levels would be 14950 and 15800 in CY21.

Nifty 50 may reach 14,800 in CY21

During the second half of the calendar 2020, the Nifty 50 index moved from strength to greater strength. It nearly doubled from the March lows of 7,511 to end the last day at 13,981.75. Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments, told Financial Express Online that it seems evident that going into 2021 this bullish trend will continue. Between July and September this year, 10800 was conquered which was a stiff resistance patch. “The index now has the wings to claim 14600 during the course of the new year and can also attempt 14800,” he said. 10800-11500 is a good support range for this strong up move and till that holds, Hathiramani believes that the overall trend for 2021 would remain positive and boisterous. “Any corrective wave down can be utilised to build long positions for higher targets,” he said.

‘Markets may see correction if FPI flows dry-up’

A host of factors such as Union Budget 2021, corporate earnings, macroeconomic data, auto sales number, along with COVID-19 vaccine roll-out and other global cues will set the market tone for the year 2021. Dhiraj Relli, MD & CEO, HDFC Securities believes that a large portion of the Nifty run-up is over and, from now on, its rise (if substantial) would be gradual and measured. “In the interim, we may see bouts of correction, especially if FPI flows dry up for a couple of days/weeks,” he said. Stock-wise moves could continue to take place even as institutions continue to take higher exposure out of their erstwhile preferred 50-80 stocks.

Vaishnav also said that the bulk of the Nifty 50’s gains have come over the last quarter where the index piled up close to 34 per cent. He also expects the frontline markets to stay in a broad consolidating range as it takes a potential breather from the current rally. “Since the present rally has been largely fueled by strong FII Inflows triggered by extreme weakness in the Dollar Index, keeping an eye on the Dollar Index would be crucial as a technical pullback in the Dollar may disrupt the present up move,” he said.