After The Bell: Profit booking above 13,400; here’s what investors should do on Wednesday

Indian shares rallied for the sixth day in a row on December 8 to hit new highs but failed to keep the momentum going. The Nifty50 had a touch and go moment with 13,400, while the S&P BSE Sensex hit 45,742.

The Sensex came off the day's high and ended at 45,608, gaining 181 points. The Nifty50 closed 37 points higher at 13,392.

Sectorally, action was seen in energy, IT, realty, as well as financial stocks, while telecom, power, utilities, and healthcare came under selling pressure.

Broader markets underperformed the benchmarks, with the BSE midcap falling 0.16 percent and smallcap index 0.29 percent.

UltraTech Cement, TCS, Reliance Industries, Wipro, and HCL Tech were among the major Nifty gainers. Sun Pharma, Hindalco Industries, IndusInd Bank, Coal India, and Adani Ports were among the big losers.

Stocks & sectors

The BSE IT index rose 1 percent and the realty index was up 0.7 percent, while selling was witnessed in the power, metal and healthcare sectors.

A volume spike of more than 100 percent was seen in United Breweries, Reliance Industries and PNB.

Long buildup was seen in PNB, Bank of Baroda and United Breweries, while short buildup was seen in Concor, Bosch, and L&T Finance Holdings.

More than 300 stocks, including Wockhardt, Shaily Engineering, Maruti Suzuki and Marico, hit a 52-week high on the BSE.

Here is what experts think that investors should do on December 9:

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

As per the Japanese candlestick formation, the Nifty 50 index made a Doji pattern at the top of the current up move. It is an indication of indecisive activity after a rally of 650 points in the Nifty 50 index.

On December 9, the Nifty should trade in the 13,460-13,300 range. Below 13,350, the index could fall to 13,250 or 13,200.

On the higher side, 13,460 would act as the strongest hurdle but above that, the chances of the index hitting 13,550 will turn bright.

Traders need to be extra cautious as smallcap stocks are participating heavily in the momentum of. Buying is advisable only on major dips at around 13,200-180.

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

The Nifty opened on a positive note and continued to soar by making a new lifetime high of 13,435. It traded in a wider range of 100 points but ended with gains of 35 points to close near 13,400.

It formed a Doji candle on the daily scale but formed higher highs-higher lows for the seventh session.

It has to continue to hold above 13,200 to witness an up move towards 13,500 then 13,750, while on the downside, major support exists at 13,000 zones.

Binod Modi, Head Strategy, Reliance Securities

A continued foreign portfolio investment flow remained a dominant factor to drive the market and given the consistent weakening of the dollar along with the increased possibility of new fiscal stimulus, we believe domestic equities will continue to get support from FPIs in the near term.

However, irrational exuberance is quite visible in many counters, given a sharp rally in smallcap stocks as investors are pouring money in all stocks, irrespective of earnings potential.

This could lead to a sizeable erosion of wealth, especially for retail investors when the cycle turns. We maintain our cautiously optimistic view about the market and advice investors to focus on quality names with high margins of safety.

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

The Nifty posted a positive daily close sixth day in a row. However, the index witnessed a tough battle between the bulls and the bears at the daily upper Bollinger Band and ultimately formed a Doji pattern on the daily chart.

So, there is the possibility of a brief pause before the index stretches higher. On the downside, 13,250-13,280 is a near-term support zone and any dip is likely to find support there. The overall outlook for the Nifty continues to be positive with the short-term target at 13,700.

Vinod Nair, Head of Research at Geojit Financial services

Since November, PSU banks have been outperforming the market. The rally continued on December 8 to take Indian benchmark indices to new highs in a volatile session.

Reports of a possible emergency vaccine rollout in India and hopes of a stimulus package in the US and Japan have also helped in keeping momentum live. European stocks are experiencing negative waves due to fading hopes of Brexit trade talks and an increasing number of COVID cases.

Though markets are at an all-time high, the expected updates on vaccine rollouts and stimulus packages have the potential to take them up further.

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.