Another record high for Nifty50! What should investors do now?

It was a Fantastic Friday for the Indian markets! The Nifty50 hit a fresh record high of 12,311 while the S&P BSE Sensex rose nearly 150 points and is now just 210 points away from hitting a fresh record high.

For the week, the S&P BSE Sensex closed with gains of over 0.33 percent while the Nifty50 closed with gains of 0.25 percent for the week ended January 10.

In the broader market space, the S&P BSE Smallcap index rose 1.1 percent while the S&P BSE Midcap index closed 0.3 percent higher in the same period.

Let’s look at the final tally on D-Street for Friday – the S&P BSE Sensex rose 147 points to 41,599 while the Nifty50 closed with gains of 40 points at 12,256.

Sectorally, the S&P BSE Realty index, followed by Metals, FMCG, and Auto index while profit booking was seen in telecom and consumer stocks.

The broader market outperformed as the S&P BSE Smallcap index rose 0.42 percent while the S&P BSE Midcap index was up 0.40 percent.

As Nifty hit fresh record highs, there are more than 50 companies that hit a fresh 52-week high that include names like MRF, Shree Cements, SRF, Dr. Reddy’s, HDFC, Alkem Laboratories, MCX India, Ipca Laboratories, and Balkrishna Industries.

Experts are of the view that investors should adopt a buy on dips strategy as long as Nifty50 holds above 12000 levels. But, intermittent volatility cannot be ruled out due to ongoing earnings season.

“We reiterate our positive yet cautious approach on the benchmark index and suggest awaiting a decisive breakout above 12,400 in Nifty for a sustainable up move,” Ajit Mishra, VP – Research, Religare Broking Ltd.

“Meanwhile, volatility would remain high on the stock-specific front due to prevailing earnings season and global uncertainty so plan your trades accordingly,” he said.

Top Nifty gainers: Maruti Suzuki, Infosys, Tata Motors, and Coal India

Top Nifty losers: IndusInd Bank, ICICI Bank, ZEE Entertainment, and YES Bank.

Stocks & Sectors:

Sectorally, the S&P BSE Realty index was up 1.8 percent, followed by the S&P BSE Metal index which was up 1.2 percent, and the S&P BSE FMCG index was up 0.8 percent.

Profit-taking was seen in the S&P BSE Telecom that was down 0.6 percent, and the Consumer Durables index closed with losses of 0.16 percent.

Volume spike of 100-200% was seen in stocks like Tata Global Beverages, Dish TV, Sun TV, Dr Reddy’s, Lupin, and Mahanagar Gas.

Long Buildup: Sun TV, Tata Global Beverages, Tata Steel, Bharat Forge

Short Buildup: Bharti Airtel, ZEE Entertainment, Pidilite Industries

What to watch out for in the coming week:

Markets will first react to the IT major, Infosys, results in the early trade on Monday. Infosys, on January 10, stated that its Audit Committee found no evidence of financial impropriety or executive misconduct. Infosys Q3 profit jumps 11%, raises FY20 revenue guidance to 10-10.5%.

On the macro front, investors will react to the industrial production data for November. In the coming week, CPI, and WPI data will be important. Consensus is showing inflation is likely to spike further to 6.7% in December due to oil prices and vegetable prices.

Crucial earnings to watch in the coming week include —
Saturday – Avenue Supermarts,
Monday – Delta Corp,
Tuesday – Wipro, IndusInd Bank, MindTree, Bandhan Bank
Wednesday – L&T Infotech, Den Networks
Thursday — Rallis India, Tata Metaliks, and

Friday — RIL, HCL Tech, ICICI Lombard, L&T Finance Holding etc. among others.

Stocks in the News

Yes Bank: Yes Bank share price declined 4 percent following reports of resignation on the company’s independent director. Uttam Prakash Agarwal submitted his resignation in the morning, CNBC-TV18 reported.

Aarti Industries: Aarti Industries share price slipped more than 5 percent after the income tax department carried out searches at the company’s premises. The investigation wing of the income tax department was conducting searches at the offices and manufacturing plants of Aarti Industries, a source told .

BEML: Shares of state-owned BEML gained 2 percent on January 10 after the government appointed consultancy firms to sell off some assets of the company.

KNR Constructions: KNR Constructions share price gained 9 percent on January 10 after the company decided to sell its stake in its SPV.

Delta Corp: Delta Corp share price added 2 percent on January 10 after a subsidiary of the company got a license for a casino in Nepal.

Technical View:

Nifty50 formed a Doji kind of candle on the daily charts which reflects indecisiveness among the bulls and bears

Few momentum oscillators on weekly charts generated sell signals accompanied with negative divergences. Hence, in next trading session if the index fails to sustain above 12213 levels then it can undergo selling pressure, suggest experts

If the correction in the next couple of days drags down the index into the bullish gap zone of 12132 –12044 levels then that shall be considered as an opportunity to create fresh longs.

A close above 12300 levels can extend the upswing towards 12450 levels. Traders are advised to buy either on correction or on a strong close above 12300 levels, suggest experts.

Three level to watch on Monday – 12213, 12,311, 12450