Nifty scales record high as falling Covid cases lift sentiment

Technically, the index has been trading in a bullish trend with higher highs and higher lows formation for the last couple of days. In the recent trade, the price settled above the prior resistance and made a new record high, which indicates continued strength in the counter, said Sumeet Bagadi, Executive Director, Choice Broking.

"Moreover, the index has also sustained above Ichimoku Cloud formation and 50-Days Moving Averages that suggest bullish presence for the long term. A momentum indicator RSI and MACD also witnessed positive crossover. At present, the index is having good support at 15,300 levels while resistance may come around 15,600 levels, he said.

Sensex rallied 308 points and NSE Nifty hit a fresh record on Friday, tracking gains in index heavyweights Reliance Industries, HDFC twins and Kotak Bank amid positive cues from global markets.

The 30-share BSE index ended 307.66 points or 0.60% higher at 51,422.88. The broader NSE Nifty surged 97.80 points or 0.64% to close at its fresh peak of 15,435.65.

The Nifty eventually touched a new high above 15,431 level but the Sensex is still behind by 1,000 points at 5,1400 and the main reason is the underperformance in HDFC and HDFC Bank. However, in the coming days we could see the rally in HDFC twins and in those stocks that have underperformed in the current upmove, said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

"The Nifty has managed to break the 15430 level after 16 weeks of consolidation. This is the biggest and time-consuming consolidation which will definitely give a good support to the market and we can see a further increase above 15000," he said.

According to Weekly and Daily formation, the Nifty can stop once between 15,500 and 15,600 levels. The 15,250 and 15,100 are big pillars for the market and as long as the Nifty stays above 15,100, we can see the level of 16,000 to 16,200, Chouhan said. BankNifty is also showing strength and we can see the level of 36,500 in the coming weeks. BankNifty's main support is 34,400 and 34,000.

In the coming months, technology and metals stocks are to be accumulated during the correction. However, Banks, Insurance, Pharmaceuticals and FMCG stocks are good for trading. Till the date, FIIs infused net 1,000 crores in the equities, however, for the month they are still net sellers to the tune of 9,300 crores, Chouhan added.