By Ajit Mishra
Markets continued their uptrend, gaining over half a percent due to favorable cues. Despite a subdued start, the Nifty remained range-bound for most of the week, with buoyancy in the final session leading to decent gains.
The Nifty closed at 24,502, up by 0.73%. Sectorally, FMCG, IT, and pharma were top performers, while metal, realty, and auto sectors saw profit-taking. The broader indices paused after their significant performance and settled flat.
In the coming week, attention will be on earnings and Union Budget updates, likely increasing volatility. Global cues, particularly from the US market where the Dow Jones Industrial Average (DJIA) reached a new high, are encouraging.
Having surpassed the 24,500 hurdle, the Nifty could aim for the 25,000 mark if it can sustain that level. In the event of profit booking, we expect the index to respect the 23,900-24,250 zone. Despite the overall positivity, increased volatility during the earnings season and budget-related discussions are normal.
Hence, a hedged approach is advisable, especially for overnight leveraged positions, along with careful monitoring of position sizes.
We recommend focusing on IT, energy, FMCG, and pharma for long trades. For themes like railways, defense, and other select PSUs, which have seen significant recent gains, traders should maintain extra caution and suggest trailing stop losses on the rise.
(About the Author: Ajit Mishra is SVP, Research at Religare Broking).
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