Nifty50 at 19,000? Is the index headed towards a new record high in near term? Here's what analysts say

The Nifty50 index has been on a bull run recently and analysts believe that the benchmark index is likely to hit its new record highs in the coming few sessions. Select analysts believe that Nifty may race past the 18,900 mark and even key psychological levels of 19,000, while others believe that new highs may take a little more than expected.

The NSE's barometer hit 18,640 on Monday, tracking the firm global cues, before giving up its gains partially. The index tested its 52-week high at 18,887.60 on December 1, 2022, before it went into the corrective phase. However, the index has gained about 3 per cent in the last one month, and is up about 6 per cent in the last three-month period.

80 per cent of Nifty 50 stocks are above 200-DMA which has significantly improved from the prior 2 weeks' average of 76 per cent. FIIs pumped in $1,004 million last week, as compared to an inflow of $850 million in the previous week, while DIIs took out $196 million, as compared to an inflow of $421 million in last week, said Nuvama Institutional's report.
 

Fundamentally, strong FII buying, upbeat India Inc earnings, and positive global cues have been pushing the market higher, countering inflation and recession fears.

On a technical basis, the index is charged after the consolidation phase is over, respecting the key support levels on the charts.

Last week, Nifty opened on buoyant but it remained choppy amidst the uncertainty around the US Debt ceiling. The benchmark index briefly traded in 197 points trading range with the pivotal point near 18600 on the weekly timeframe acting as immediate resistance whereas the pivotal point of 18458 on the daily timeframe as stiff immediate support, said BP Equities.

"The price action closed the week without showing any directional bias, however, it ended the week forming an inside bar that shows volatility compression. The index is anticipated to resume its up move to all-time highs provided the support zone of 18,460-18,300 remains intact," it added with the key levels of resistance at 18660-18887 in the near term.

In the last one week, the Nifty Pharma index has surged about 3 per cent, followed by strong gains in the Nifty PSU Bank index. Broader markets have outperformed the headline peers as Nifty Midcap 100 index is up about 2 per cent, while Nifty Smallcap 100 index has gained more than 3 per cent. As a result, India VIX has eased about 9 per cent to 11.2 levels.

"We continue to expect Nifty 50 to take support at higher levels with RSI continuing to find strength even as MACD shows a dip in momentum. Short-term support is seen at the previous high of 18430 levels while resistance is likely to be at 18700 levels," said IIFL Securities.

Nifty Midcap 100 index has broken out from the long-term consolidation pattern and has created a new all-time high. RSI continues to be at overbought levels, but it tends to be at this zone when there is a beginning of a sustained up-move, it said. It continues to maintain a bullish but cautious stance for the short-term owing to the sharp rally witnessed in the index, said IIFL.

In the last one-month, Nifty Midcap 100 and Nifty Smallcap 100 indexes have surged up to 7 per cent, each, while Nifty IT index has gained 6 per cent. Nifty Auto index has surged over 10 per cent, while Nifty Realty index has jumped more than 9 per cent. Nifty IT, FMCG, and Media indices are up 6 per cent each, while Nifty Bank has gained 4 per cent.

On the weekly chart, the index has formed a bearish candle forming a higher high-low formation indicating positive bias, however, it indicates a pause after a strong rally. The chart pattern suggests that if Nifty crosses and sustains above 18,700 level it would witness buying which would lead the index towards 18,900- 19,000 levels, said Axis Securities.

"However, if the index breaks below the 18,450 level it would witness selling which would take the index towards 18300-18200. For the week, we expect Nifty to trade in the range of 19,000-18,200 with a mixed bias. The weekly strength indicator RSI is above its respective reference lines indicating positive bias," it said.

Nifty patterns on multiple periods suggest; a bearish candle on weekly might be an indication of the continuation of the bearish trend towards the pivotal support placed around 18400 levels. However, a buy-on dips strategy is recommended as long as 18,400 is intact, said SMIFS Research.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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