Market is in no mood to go down now

THE domestic equity market opened with flat to negative tone, and recovered gradually to the new lifetime highs. The benchmark index, the Nifty, closed at 16,705.2 with a 68.30 points gain. The Nifty Metal, Pharma, and Infra sector indices are up by over a per cent. The Midcap-100 was up by 1.06 per cent, and Smallcap-100 advanced 0.77 per cent. The overall market breadth is positive as 1,214 advances and 778 declines were recorded. About 65 stocks hit a new 52- week high, and 160 stocks traded in the upper circuit.

The Nifty closed at a new peak with renewed broader market participation. It surpassed 16,700 levels and is nearing our target of 17,265. The new derivative series began with moderate gains and indicated that the market is not in the mood to go down. The Midcaps and Smallcaps have outperformed and regained the momentum. All sector participation is a good sign. The Nifty formed three highs, almost at the same level 16,702-722 zone. This zone will act as a resistance at the beginning of next week. At the same time, last week's low of 16,376 will act as key support. This 16,376-722 zone, is crucial for near term direction. In case, the Nifty consolidates in this zone for the next few days, because of over 800 points sharp rally during the current month, the market may witness stock specific and sector rotation. Another reason for consolidation is that many of the indicators entered into the overbought zone. But, this is not a weaker or bearish signal to take positions. As the Nifty is at a lifetime high, it is not wise to think with negative bias. If anyone is not sure of trend continuation, they may try with higher relative strength stocks in the current market conditions.

(The author is a financial journalist, technical analyst, and family fund manager)