12K possible on Nifty as long as it holds 11,500

What a turnaround we witnessed on D-Street as Sensex recouped losses and closed higher by over 200 points while Nifty50 reclaimed 11,650 on April 9.

The final tally – the S&P BSE Sensex closed 238 points higher at 38,939 while the Nifty50 ended 67 points higher at 11,671.

IT, realty, auto, banks and metal sectors witnessed sharp buying while profit booking was seen in telecom and consumer durable stocks.

On the chart, 11,550-11,500 is acting as crucial support for the index which is also close to its 13-day exponential moving average (EMA). This is the fourth time when index bounced back after retesting this crucial support in the last eight trading sessions.

Technical experts are of the view that as long as Nifty50 holds above 11,500, there is a high possibility of index climbing towards 12,000 soon. If Nifty fails to sustain above 11,700 in the next session, then one may expect another negative session.

However, investors are advised to stay with top companies across various sectors to achieve the goal of diversification as volatility could increase.

“Maximum Put writing was seen around 11,500 that acted as crucial support for the index in the last 3-4 trading sessions when there was nervousness. Keeping everything in mind, the broader trend is still intact. If we are able to hold on to 11,500, the momentum should take Nifty towards 12,000-12,100 zone,” Ashish Chaturmohta, Head of Technical and Derivatives at Sanctum Wealth Management told Moneycontrol.

“In terms of specific stocks and sectors, we like financials. Among financials we like private sector banks such as Axis, ICICI Bank, RBL Bank, DCB Bank where the trend is promising. In the NBFC space, we like HDFC, LIC Housing, Chola are top bets,” he said.

In the agro-chemical space, Chaturmohta likes UPL. In the specialty chemical, top bets include Vinati Organics is showing traction.

Stocks in news:

The earnings season began on a good note with Delta Corp reporting a 25 percent increase in its bottom line for the current quarter compared to the previous year. But, shares closed in red, down by about 1 percent.

Indiabulls Housing Finance declined more than 3 percent after a media report said Gehlaut will exit realty biz for focusing on financial services business.

Shares of Usha Martin fell 8 percent on the back of reports that Tata Steel will take over the company’s Jamshedpur steel plant.

Firstsource Solutions gained more than 5 percent after billionaire investor Rakesh Jhunjhunwala increased his stake in the company from 2.89 percent to 3.26 percent.

Adani Enterprises rose 3 percent after inching closer to opening a thermal coal mine in the Australian state of Queensland after Australia’s environment minister approved a groundwater management plan.

Shares of Ashok Leyland surged nearly 5 percent after it unveiled plans to scale up its global operations by setting up more assembly plants overseas, including in the CIS (Commonwealth of Independent States) region and African countries.

Global Updates:

European markets are trading higher despite a new tariff threat from the United States government.

Asian markets ended higher as Shanghai Composite ended marginally lower at 3,239.66 and Kospi gained 0.13 percent to close at 2,213.56.

Hang Seng was up 0.17 percent at 30157.49 and Nikkei rose 0.19 percent at 21,802.59.