After The Bell: Breakout, finally! What should investors do on Wednesday?

It was a terrific Tuesday as the Nifty50 witnessed a breakout after consolidating in a narrow range for almost two-three weeks. Though Nifty50 had a touch-and-go moment with 11,400, it closed above 11,370, which turned out to be a crucial resistance level.

The Nifty50 ended the day with gains of 138 points at 11,385 and the S&P BSE Sensex rose 477 points to 38,528.

Sectorally, action was seen in realty, banks, finance, consumer durables, and metals while mild profit-taking was visible in the healthcare space.

Experts are of the view that the momentum is likely to continue and investors should go long on the index, even on dips, for a target of 11,500, and a stop can be placed below 11,250-11,200 levels.

“The Nifty50 appears to have resumed its uptrend with a fresh breakout after surpassing previous swing highs present around 11,366 levels. Armed with this fresh breakout, the bulls can head to bridge the bearish gap present in the 11384 –1536 zone which was formed as an initial reaction to the current COVID crisis on February 28,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

Once the Nifty manages to sustain above 11,536, then it can strengthen the bullish sentiment and can open up much bigger targets. After this breakout, 11,253 remains a critical short-term support level, he said.

Also Read: Gainers & Losers: 10 stocks that moved the most on August 18

We have collated views of experts on what investors should do on August 19 when the market resumes trading:

Expert: Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The formation of a bearish engulfing pattern of  August 14 has been nullified completely. This is a positive signal and one may expect further upside in the short term.

The downside breakout attempt of sideways range of August 14 has proved to be a false downside breakout. The Nifty is nearing an intermediate resistance as per long-term charts around 11,500 levels (trend line resistance as per change in polarity, as per weekly chart) and this area is expected to be broken on the upside before showing any downward correction from the highs.

The short-term trend continues to be positive. The Nifty can encounter another overhead resistance around 11,500-11,600 levels in the next few sessions and there is a possibility of another round of minor profit-booking from the highs by the weekend or by next week. Immediate support is now shifted to 11350-11300.

Expert: Chandan Taparia of Motilal Oswal Financial Services Limited

The Nifty closed the session with decent gains of around 140 points and made a strong bullish candle on a daily scale. The major trend is intact to positive and recent consolidation breakout could start the fresh leg of the rally in the market.

Now, it has to continue to hold above 11,250 to witness an upmove towards 11,500 and 11,600 level while on the downside, support exists at 11,200-11,150 zones.

Expert: Abhishek Karande, CMT, Senior Research Analyst, Reliance Securities

Markets continue the upward oscillation and fresh attempts to surpass 11,450 will be made, leading to further higher moves visible until 11,600-mark.

Kotak Bank at LTP is poised to surpass the prolonged resistance of 1,400, a break of which will open the way for the up move until 1,500.