Sensex, Nifty scale fresh all-time highs today; for how long can bulls continue rallying?

HDFC was the top Sensex gainer, surging 4.77%, followed by Kotak Mahindra Bank, ICICI Bank, SBI, HDFC Bank, and Axis Bank. (Image: REUTERS)

Bulls helped domestic equity benchmark indices scale fresh highs for the second day straight on Wednesday. S&P BSE Sensex reached a new all-time high of 54,465 points, NSE Nifty 50 reached 16,290. On the closing bell, Sensex moved down marginally and settled at 54,369, gaining 1.02% while Nifty 50 finished the trading session at 16,258 or 0.79% higher. Bank Nifty successfully closed above 36,000 mark gaining 2.33%. HDFC was the top Sensex gainer, surging 4.77%, followed by Kotak Mahindra Bank, ICICI Bank, SBI, HDFC Bank, and Axis Bank. Titan fell 2% to close as the top Sensex laggard, followed by Nestle India and Ultratech Cement. India VIX fell 3.93%.

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

“Bulls continue with the positive momentum as benchmark Nifty hit another fresh all time high of 16290 after a massive breakout. Technically, on daily charts the index has formed breakout continuation formation, which is broadly positive for the market. But intraday charts and momentum indicators suggest temporary overbought situation and traders may take cautious stance near 16300 -16330 level. We are of the view that in next few trading sessions buying on dips and sell on rallies would be the ideal strategy for the day traders. The trade setup suggests that 16200- 16150 would be the key support level for the bulls. On the flip side, the 16300-16330 level could be the immediate hurdle for the market.”

Deepak Jasani, Head of Retail Research, HDFC Securities –

“Nifty rose with another gap up reflecting the pent up demand in index heavyweights. Advance decline ratio however has turned very negative despite Nifty being up, suggesting profit taking in the broader markets. With other markets doing well, Nifty could continue to remain steady/up, while the broader market correction could continue for a few sessions.”

S Hariharan, Head – Sales Trading, Emkay Global Financial Services –

“Nifty is trading close to technical resistance from a trendline connecting earlier highs in CY2021 (Feb & Jun) – seen in conjunction with non-confirmation of strength in Mid-cap & Small-cap indices, which had hitherto been out-performing headline indices, this suggests a narrow advance, and potential for a short-term pull-back. Long futures open interest for the Retail segment has seen some unwinding over the last week and net long positions are down to mid-Jun levels; this was also evident in cheap roll spreads during July expiry, and points to reluctance to extend leverage on long positions. High-beta sectors appear most vulnerable to a correction in the near-term.’’

Vinod Nair, Head of Research at Geojit Financial Services –

“Domestic market extended its rally as banking and finance stocks started to rebound after good recent earnings, upbeat economic data and in anticipation of RBI policy. The market is expecting MPC to maintain the supportive measures and leave the rates unchanged.”

Rohit Singre, Senior Technical Analyst at LKP Securities –

“Nifty stand tall for the second consecutive day after giving an ascending triangle breakout on the daily chart and closed a day at 16259 with gains of nearly one percent. the index has formed immediate resistance near 16300 zone for further upside index needs to cross 16300 zone decisively or else we may see some profit booking towards immediate support zone of 16180-16090 zone but again any dips will be again buying opportunity until holding above 16k mark.”