After The Bell: Terrific Tuesday, what should investors do on Wednesday?

Indian market rose to a seven-month high on October 7, tracking positive global cues as banking stocks led the rally on the home front on signs of healthy deposits and advance growth.

The S&P BSE Sensex rose 600 points to 39,574 while the Nifty50 closed with gains of 159 points to 11,662.

Sectorally, action was seen in finance, realty, Bankex, and auto stocks while mild profit-taking was seen in metals, oil & gas and power stocks.

Investors’ wealth rose by more than Rs 1 lakh crore. The average market capitalisation of the BSE listed companies rose from Rs 158.12 lakh crore on October 5 to Rs 159.35 lakh crore on October 6.

“The market is booming to a new level in anticipation of better Q2FY21 results, a clear improvement in domestic economic data and an uptick in the global market. The IT and banking sector will be in focus, in the coming weeks, in expectation of real benefit in Q2 result,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“Banks are showing healthy deposits & advance growth, with signs of recovery in growth to pre-COVID level, while a positive Supreme Court verdict is expected next week regarding moratorium,” he said.

Here is what experts have to say on what investors should do on October 7:

Ajit Mishra, VP-Research, Religare Broking

We are currently dancing to global tunes but may see a shift in the focus with the beginning of the earnings season. Besides, the RBI has announced new dates for the MPC meeting and the outcome will be known on October 9.

We thus expect the rate-sensitive pack to remain volatile in the near future. Amid all this, the Nifty has surpassed the 11,600 hurdle and we are now eyeing the 11,800-zone so traders should continue with “buy on dips” in the index while stocks may continue to see the swings on both sides.

Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services Limited

The Nifty opened high and continued its positive momentum towards the 11,680 zone. It consolidated near 11,600 for the most part of the session and witnessed a strong rally of 100 points in the last hour.

It has been making higher lows for the last seven trading sessions and supports are gradually shifting higher. It formed a bullish candle and gave the highest daily close of the last 139 trading sessions, surpassing the previous swing high of 11,618.

The index has to continue to hold above 11,500 for an upmove towards 11,800 and 12,000 while on the downside, major support exists at 11,450 then 11,333.

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

The Nifty closed in a stellar form. It also managed to cross its intermediate high of 11,618 which was made on September 16, 2020. We should now achieve 11,800, which is the next resistance level. The trend and sentiments are bullish and we could even achieve 12,000 once we get past 11,800.

Sumeet Bagadia, Executive Director at Choice Broking

Technically, the Nifty penetrated the key trend line resistance of 11,600 and triggered the fresh positions. Now on the higher side, resistance is placed at around 11,700 of the immediate swing high and crossing above that could further extend till 11,780.

The momentum indicators RSI (14) have surged till 61.90 mark, with a positive crossover that points to strength in the benchmark index.

Furthermore, the Nifty has been trading with the support of 21 EHMA, which signifies a further uptrend. At the present level, the Nifty is facing resistance at 11,700-11,750 while support comes at 11,530-11,570.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.