After The Bell: No Monday Blues On D-St; Here’S What Investors Should Do On Tuesday

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There market's record run continued on December 7, with both the Sensex and the Nifty scaling new highs. The S&P BSE Sensex rallied 347 points to close at 45,426 rallied, while the Nifty50 gained 97.30 points, or 0.73 percent, at 13,355.80.

During the day, the S&P BSE Sensex hit a high of 45,458 while the Nifty50 touched 13,366.

Sectorally, action was seen in telecom, infrastructure, FMCG, public sector, healthcare, and oil & gas stocks. Some profit-taking was seen in consumer durables and realty stocks.

The S&P BSE midcap index rose 0.9 percent, while the smallcap index closed with gains of 1.3 percent.

Strong global cues supported by news around COVID vaccine and signs of economic recovery is fuelling risk-on sentiment on D-Street.

“The market started this week continuing its winning streak, much of the momentum was from pharma and small caps stocks, the broader market is outperforming the main indices. European stocks have turned the focus to the on-going post-Brexit trade deal between the UK and EU, trading a bit cautiously,” Vinod Nair, Head of Research at Geojit financial services told Moneycontrol.

The domestic market would o remain strong, backed by vaccine progress, economic recovery and strong FII inflows, he said. "However, it is advisable for investors to consider partial profit-booking in pockets trading very expensive like highly valued largecaps and trade vigilantly on small & microcaps though the momentum is expected to remain positive in the short to medium term,” he said.

Stocks & sectors

The BSE healthcare, oil & gas and FMCG indices rose 1 percent each, while there was some selling in the realty index.

A volume spike of more than 100 percent was seen in TVS Motor, ICICI Prudential and Glenmark Pharma.

Long buildup was seen in Glenmark Pharma, Tata Chemicals and Bosch, while short buildup was seen in Power Grid, SBI Life and Cholamandalam Financial.

More than 300 stocks, including Indostar Capital Finance, Rain Industries, and TVS Motor hit a 52-week high on the BSE.

Here is what experts think that investors should do on December 8:

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

The Nifty formed a bullish candle on the daily scale and continued forming higher highs-higher lows from the sixth trading session running.

Buying is advisable only if Nifty falls to 13150/13100 levels. Pharmaceuticals stocks should be in the focus list. Technology stocks are also due for a short term up move

- Shrikant Chouhan

Binod Modi, Head Strategy at Reliance Securities

We believe positive progress on COVID-19 vaccination and RBI’s strong commitment to support the economic recovery are supporting the market rally. Further, increased visibility of fiscal stimulus in the US with a weak dollar may continue to attract FPIs into emerging markets, including India.

However, a threat to sharp earnings growth is emerging from a sharp rise in input costs and may play a spoilsport in the near to medium term.

As current valuations require very high earnings growth, we remain cautiously optimistic about the market and advice investors to focus on quality names with high margins of safety.

Ashis Biswas, Head of Technical Research, CapitalVia Global Research Limited

The Nifty has witnessed some strong trends in the market and an attempt to overcome the resistance level around 13,340.

While sustaining above 13,200 is the key factor from a short-term perspective, our research suggests maintaining above this level to open the gate for a movement till 13,390.

The momentum indicators like RSI, MACD to stay positive and market breadth will improve, further strengthening the short-term bullish outlook.

Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas.

The Nifty continued with its positive momentum from the previous week. As a result, the index witnessed a steady rise on December 7. The index has scaled above its daily upper Bollinger Band and is attempting to push the bands into an expansion phase.

Once the bands start the expansion, it will assist the price action on the way up. On the higher side, the immediate hurdle zone is at 13,380-13,400.

Overall, the index is expected to march towards 13,700 in the short term. On the other hand, the support zone shifts higher to 13,200-13,250

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities

Looking at the sectoral performance, technically, the Nifty Pharma should quote at 13,500 in the near term. December 8 will be an interesting day for the markets, as a close above 13,360 will see the Nifty rallying further.

Above 13360 levels, the Nifty would rally to 13,500. Buying is advisable only if the Nifty falls to 13,150-13,100 levels. Pharmaceuticals stocks should be on the focus list. Technology stocks are also due for a short-term up move.