Sensex soars to record closing high, will rally sustain? Here’s what to do now

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Updated: November 4, 2019 5:04:16 PM

Even as the 30-share Sensex closed at a fresh record high on Monday, extending its winning streak for the 7th consecutive session, stock market experts caution against jumping into the rally at this point.

Equity markets, Nirmala Sitharaman, Sensex, corporate tax rate, GST Council, US-China trade talks, FPIAfter hitting a fresh record high of 40,483.21 intra-day, the Sensex ended 137 points up to 40,301, its highest close ever.

Even as the 30-share Sensex closed at a fresh record high on Monday, extending its winning streak for the 7th consecutive session, stock market experts caution against jumping into the rally at this point. After hitting a fresh record high of 40,483.21 intra-day, the Sensex ended 137 points up to 40,301, its highest close ever. “Sensex has witnessed a massive up-move in the past week on expectations of a tax relief by the Government and sound corporate numbers in certain sectors. However, the rally seems to be close to maturity now and will undergo a correction soon,” Umesh Mehta, Head of Research, Samco Securities told Financial Express Online, adding that  investors should not blindly get into aggressive buying but wait for a decent correction before picking quality stocks.

Also read: Infosys finds no evidence yet on whistleblower allegations; here’s what it clarified to stock exchange

Technical analyst Milan Vaishnav said that even the Sensex has reached a record high yet again, the Nifty is still away from its life-time high levels, indicating that a clear breakout on the higher time frame chart is still awaited by Nifty, and it remains overbought on the short-term charts. “We recommend that all these up-moves should be used to protect profits at higher levels by investors and traders. It should not be surprising if we see some money being taken off the table and some consolidation is seen,Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst,
Gemstone Equity Research & Advisory Services told Financial Express Online.

Ajit Mishra, VP- Research, Religare Broking noted that the market sentiments are definitely upbeat given the in-line earnings, hopes of gradual economic revival in the coming quarters as well as supportive global cues. “Going forward, we believe it’s crucial that earnings should pick-up as the expectations too are high. Further, we expect broader markets (mid and smallcaps) also to join the rally as growth concerns are overdone and the valuation looks attractive for some of the fundamentally good counters,” he told Financial Express Online. However, there could be some profit booking in the near term, given the sharp run-up and investors should be selective in stock picking and invest in a staggered manner, he added.

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