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The Indian stock market experienced a significant milestone on Tuesday as the Nifty index crossed the 26,000 mark, achieving a new record high. This feat was accomplished after a robust 1,000-point rally spanning 38 trading sessions. However, despite this achievement, the Nifty experienced a slight pullback, closing at the same level as Monday's finish due to technical factors and the expiry of the Nifty Financial Services index. The focus remained on the Nifty's performance, but within the broader markets, stock-specific activity was observed. The Midcap index managed to hold onto some gains, while the smallcap index registered losses exceeding 0.5%. Notable stock movements included AstraZeneca and IEX, influenced by their respective newsflow, and SH Kelkar and Arvind Smartspaces, which surged due to positive brokerage commentary.
Given the Nifty's significant gains and the upcoming emergence of domestic triggers, analysts are questioning whether it is prudent to book profits at the current levels. They recommend waiting for the earnings season, which is slated to start in the second week of October. Companies are expected to start sharing their quarterly business updates next week, marking a key trigger for the markets. The final few minutes of trade saw selling pressure emerge, leading to a decline of nearly 70 points from the Nifty's peak after it breached 26,000. Wednesday marks the monthly expiry of the Nifty Bank index, which has been a key focus in recent trading sessions. Foreign institutional investors were net sellers in the cash market on Tuesday, while domestic institutions were net buyers.
Osho Krishnan of Angel One advises caution, suggesting that due to the overbought conditions on the Nifty, aggressive bets should be avoided and profits should be booked at higher levels. Krishnan identifies 26,000 as a resistance level for the index, and a break above this mark could propel the Nifty to 26,200. On the downside, support is anticipated in the 25,750 - 25,700 zone. Rupak De of LKP Securities believes that for the Nifty to continue its upward trajectory, a decisive break above 26,000 is crucial. Until then, the index is likely to trade within a 200-point band between 25,800 and 26,000. Nagaraj Shetti of HDFC Securities, while acknowledging the Nifty's near-term uptrend, anticipates a period of short-term consolidation or a minor dip. Immediate resistance on the upside is predicted between 26,250, while downside support lies at 25,800.
The Nifty Bank index has played a pivotal role in driving the Nifty's journey between 25,000 and 26,000. The index's eight-day winning streak came to an end on Tuesday, with losses exceeding 100 points. During this eight-day rally, the Nifty Bank surged over 3,000 points, propelled by heavyweight names such as HDFC Bank and ICICI Bank, along with underperforming stocks like Bandhan Bank and Kotak Bank. Wednesday marks the monthly expiry of the Nifty Bank index, and the index has gained nearly 3,000 points during this series, with the majority of the gains occurring during the recent eight-day rally. Hrishikesh Yedve of Asit C Mehta Investment Intermediates observes that the Nifty Bank is currently trading within a rising channel and may face resistance at the 54,500 mark. Breaking through this level could propel the Nifty Bank to levels of 55,000 - 55,500 on the upside. Support on the downside is anticipated between 53,350 and 53,000.
Source: Trade Setup for September 25: Time to book profits after Nifty scales 26,000?