Sensex, Nifty once again scale record highs; analysts advise investors to trade with caution

The record breaking rally in domestic stock markets did not show any signs of slowing down on Wednesday as Sensex and Nifty once again set fresh record highs. Sensex now sits at 46,103 while the Nifty 50 is at 13,529. Index heavyweights helped the up move today Reliance Industries, HDFC Bank, TCS, Infosys, and Kotak Mahindra Bank all gaining during the day’s trade. Broader markets closed in the green but were underperforming the benchmark indices. Volatility inched higher, gaining 1.62% during the day to close just below 19 levels.

Vinod Nair, Head of Research at Geojit Financial services –

“Market is effortlessly rallying to a new high on a daily basis, with all the sectors contributing in the bull run. The Indian rupee is strongly moving ahead against the USD, as the dollar is attracted to domestic developments, providing an edge compared to other Asian peers. Small and Microcaps are hugely outperforming the market, and the euphoria is expected to stay in the short to medium-term. Hopes of vaccine and stimulus packages in India and developed nations are raising the spirit of equity market.”

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

“We closed very close to the day’s high which is a good sign. The Nifty has a strong bullish under current and every dip can be looked at as a buying opportunity. However, traders should be cautious as we are in a range of resistance which is between 13400 and 13700. We are now closer to the upper end of this range. A strong support lies at 13100.”

Abhishek Chinchalkar, CMT Charterholder and Head of Education, FYERS –

“Indian markets have hit yet another milestone today, with Sensex crossing the 46000 mark and Nifty moving above 13500. While the overall trend continues to be bullish, one needs to now adopt a cautious stance given how steep the advance has got in the past several sessions. Hence, we would suggest short-term traders who are already holding long positions in the market to tighten their stop losses and look out for profit-booking opportunities. Meanwhile, for those looking to create new long positions, we would suggest waiting for a minor correction, before entering on the long side.”

Ajit Mishra, VP – Research, Religare Broking –

“Markets traded upbeat for yet another session and gained over a percent, driven by positive global cues and more announcements on the stimulus package. Markets are largely mirroring global cues but the benchmark looks slightly overbought so the possibility of consolidation in the near term cannot be ruled out and it would be healthy for markets. We thus recommend booking partial profit in the existing trades and keep trailing stop losses on every rise. For fresh buying, investors should maintain extra caution on the selection of stocks and maintain “buy on dips” approach.”

Manish Shah Founder Niftytriggers –

“Nifty had a field day as it rallied by 136 points over the close of the previous day. The index heavy weights participated in the rally as both HDFC Bank and Reliance were among the gainers for the day. The momentum is strong and there are no signs of a reversal. Nifty also opened the day with a gap and one question that is raised that is this an exhaustion gap that we are seeing. A trend in motion remains in motion till the time it reverses and we do see reversal signals as yet. The fact remains that Nifty is overextended and sooner or later it will revert to the mean. If there are any signs of a reversal it could be an opportunity to buy.”