After The Bell: Nifty closes in on 14K, what should investors do on Thursday?

Indian markets closed in the green for the sixth consecutive day on December 30, as the S&P BSE Sensex rallied more than 100 points and the Nifty50 closed just a shade under 14,000.

The market bounced back after profit booking in intraday trade. The Nifty50 bounced back from its 5-days Exponential Moving Average (EMA) placed at 13,847. Finally, the Sensex ended the day 133 points higher at 47,746 and the Nifty gained 49 points at 13,982.

Sectorally, action was seen in auto, realty, metal, consumer discretionary, and consumer durable stocks, while profit-booking was seen in telecom, IT, and healthcare stocks.

Experts say 14,000 is just a formality for the Nifty. Investors are advised to remain cautious but trade long even though the index is trading near-critical resistance levels.

"The bulls stepped on the accelerator in the afternoon trade to end the day just shy of the 14k mark led by Cement & Steel stocks on hopes of higher spend on Infrastructure,” S Ranganathan, Head of Research at LKP Securities told Moneycontrol.

“Vaccine approval in the UK and hopes of approval back home lent strength to the rally despite profit-booking seen across several stocks,” he said.

Here is what experts think that investors should do on December 31:

Rohit Singre, Senior Technical Analyst, LKP Securities

The Nifty50 closed the day on a positive note for the sixth consecutive session at 13,982, with gains of half a percent and formed a dragonfly Doji candle pattern on the daily chart.

If the index manages to hold above 14,000 then only we may see the current bullish momentum to extend further towards 14,200 otherwise, some profit-booking is possible and we may see the index trade in the 13,800-14,000 zone.

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

The market continues to trade in a tight range between 13,800 and 14,000. In the first half, the bears tried to take control but in the second half, the bulls took charge and the market rallied from a low of 13,864.95 to 13,960 to near all-time high.

As most oscillators are trading at their extreme and diverging, a sideways movement is likely to continue till the index breaches the resistance of 14,000.

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

The Nifty formed a Doji candle on the daily scale with a long lower shadow, indicating that every small decline is being bought. It is making higher lows from the last six sessions and supports are gradually shifting higher.

Now, it has to continue to hold above 13,850 to witness a fresh rally towards 14,200 then 14,500, while on the downside, major support exists at 13,777 and 13,700.

Mazhar Mohammad, Chief Strategist–Technical Research & Trading Advisory, Chartviewindia.in

When markets traded in a narrow range with overbought levels in the recent past, the index witnessed a sudden single-day flash crash. Hence, traders are advised to exercise utmost caution with their long side bets as the market may remain both listless as well as volatile on monthly expiry. Any strength beyond 14,000 shall expand the rally towards 14,150.