By Ajit Mishra
Markets started the calendar year 2024 on a muted note and settled almost unchanged amid mixed cues. Participants were in the profit taking mood from the beginning and weak global cues further added to the pressure in the middle. However, buying in the select heavyweights in the final sessions trimmed the losses.
Eventually, both the benchmark indices, Nifty and Sensex settled flat at 21,710.80 and 72,026.15 respectively. Meanwhile, mixed trends across sectors kept the participants busy wherein realty, pharma and energy were among the top performers.
The continued strength in the broader indices amid consolidation further added to the trading opportunities and both midcap and smallcap indices gained in the range of 2%-2.6%.
As we enter into the earnings season next week, the focus will be on the IT majors to start with. The recent dip in the tech-heavy US index, Nasdaq, has resulted in a dip in our IT counters too however the downside seems capped now.
Besides, we are seeing profit taking in the US market benchmark index too, after the 9-week of successive advances and further decline may impact the uptrend in our markets too. Needless to say, the support is intact around the 36,500-37,100 zone in the Dow Jones Industrial Average (DJIA) and bias would again turn positive above the 37,800 level.
The recent price action in the Nifty index shows indecisiveness and we may see further consolidation. A decisive close above 21,800 would prompt the next leg of the up move towards 22,150 else consolidation will continue, with a cushion around the 21,200-21,500 zone.
Meanwhile, stay focused on identifying stocks across sectors that are showing relatively higher strength and accumulate them on dips. Besides, traders can selectively pick counters from the midcap and smallcap counters too but maintain hard stops citing the expected rise in volatility due to earnings.
(Ajit Mishra, SVP- Technical Research, Religare Broking. Views expressed are author’s own. Please consult your financial advisor before investing.)
