3rd day of record highs! Consolidation is likely

It was the third straight day of record highs for D-Street on Thursday. The S&P BSE Sensex rallied more than 100 points to hit a record high of 41,719 while Nifty50 rose to a lifetime high of 12,268.

Indian market got off to a shaky start following reports of impeachment of US President Donald Trump, but momentum picked up after China announced a list of US chemicals that will be exempted from import tariffs.

Beijing released a list Thursday of products that will no longer be subject to the tariffs, including certain types of industrial glue and adhesives, industrial polymers and types of paraffin, which can be found in cosmetics and food, said a PTI report.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 115 points to 41,673 while the Nifty50 closed with gains of 38 points to 12,259. Both Sensex and Nifty ended at the fresh record closing highs.

Action was seen in telecom, energy, auto, IT, and oil & stocks while profit-taking was seen in capital goods, realty, and banking stocks.

Not just Sensex and Nifty, 69 stocks on the BSE also hit a fresh 52-week high. The list includes Dixon Tech, SRF, Crisil, Kotak Bank, RIL, HDFC Bank, Avanti Feeds, Aditya Birla Fashion, among others.

There are over 170 stocks from the small & midcap space that hit a fresh 52-week low on the BSE, including V-Mart, Sagar Cement, Majesco, Satin Creditcare and Indian Bank.

Experts are of the view that as Nifty inches closer to its immediate hurdle placed around 12,300 levels some consolidation cannot be ruled out. Benchmark indices are showing tremendous resilience at the higher levels, however, continuous underperformance of the broader indices is still a major concern.

“Markets managed to end in the green amid volatility, in continuation to the prevailing uptrend. Initially, weak global cues were weighing on the sentiment but buying interest in the select index majors gradually pushed the benchmark higher as the session progressed,” Ajit Mishra, VP – Research, Religare Broking.

“On the benchmark front, Nifty has reached closer to its immediate hurdle of 12,300 and likely to see some profit-taking or consolidation in the near future. Considering the market scenario, we advise keeping few shorts, and choosing index majors and quality midcaps for trading and investment.

Top Nifty gainers: Bharti Airtel, TCS, Eicher Motors, and YES Bank

Top Nifty losers: Sun Pharma, Grasim Industries, and Vedanta

Stocks in the news:

JK Paper share price rallied more than 2 percent on December 19 after CRISIL upgraded the company’s long-term ratings.

Shares of Sterlite Technologies rose over 1 percent on December 19 after the company bagged “multi-million” digital contract from Telekom Albania.

Jindal Steel & Power (JSPL) share price gained nearly 5 percent on December 19 after Morgan Stanley retained its bullish stance, expecting a faster earnings growth.

Shares of Aurobindo Pharma climbed 2 percent after global brokerage Citi maintained the buy call on the stock with a target of Rs 860.

Shares of Clariant Chemicals rallied 13 percent after the company sold its Masterbatch business to a subsidiary of PolyOne for Rs 426 crore.

Technical View:

Nifty formed a bullish candle for the 3rd day in a row

This vertical move facilitated a buy signal on the daily MACD chart

For time being resistance is visible in the zone of 12290 – 12350 levels where upsides can be capped.

Risk reward ratios from current levels may not favor a long side trade

Experts advise short term traders, for time being, to remain neutral on buy side and wait for some correction before going long whereas shorting can be considered on a close below 12191 levels for a target of 12050.

Three levels: 12191, 12268, 12300-12350Get access to India’s fastest growing financial subscriptions service Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the website or mobile app.