Bullish start for stock market as Sensex and Nifty maintain positive momentum
Dec 18, 2023
Mumbai (Maharashtra) [India], December 18 : The stock market kicked off the week on a positive note, with both Sensex and Nifty maintaining upward momentum. The Sensex opened 36.26 points up at 71,515.91, while the Nifty started 2.85 points higher at 21,460.60.
The GIFT NIFTY, currently trading at 21,493, shows a positive trend with a gain of 38.50 points, indicating a favourable opening for the benchmark index.
Global markets also contributed to the positive sentiment. The Dow Jones industrial average achieved a record closing, and both the S&P 500 and Nasdaq witnessed notable gains on Friday. The surge was attributed to the Federal Reserve's dovish signals earlier in the week.
Varun Aggarwal, founder and managing director, Profit Idea, said, "The impressive performance of IT stocks contributed significantly to the market surge, with the Nifty IT index surging 4.5 per cent on Friday, following a 3.5 per cent gain on Thursday. The Nifty IT index posted a remarkable 7.2 per cent gain for the week, marking its best performance in three years".
Investors are urged to exercise caution as the market currently exhibits signs of being overbought. Technical analysis suggests that the NIFTY daily RSI is approaching 85, indicating a potential for a healthy correction and profit booking.
In response, experts recommend trimming some holdings from portfolios and maintaining cash reserves to seize potential opportunities.
Aggarwal said, "Investors are advised to exercise caution as the market is currently in an overbought condition. From a technical analysis perspective, the NIFTY daily RSI is approaching 85, indicating a potential for a healthy correction and some profit booking. Triming some holdings from the portfolio and maintaining cash reserves could present an opportunity".
Identifying nearby support levels, especially focusing on gaps created by the Nifty's rapid ascent over the past seven weeks, is advised.
Despite the absence of negative divergence, staying invested remains an option, but traders should adhere to their stop-loss levels.
The stock market's bullish start reflects positive sentiments driven by global and domestic factors. Investors are encouraged to stay vigilant, considering potential corrections, and adopt strategic measures to navigate the evolving market dynamics.
