Market has Upside potential to 11150

The market gained for the fifth days in a row with both the Sensex and Nifty making huge gains. While the S&P BSE sensex surged 358 points or 0.98 per cent to settle at 36,975.23, the Nifty50 index rose 128.10 points or 1.17 per cent to settle at 11,062.45. Broader market, however, underperformed as both the BSE Mid-Cap index and the BSE Small-Cap index ended flat. The sectors that saw strong buying interest were Metals, IT and Oil & Gas.

Stocks in action: Reliance Industries (up 1.52 per cent) and ICICI Bank (up 1.86 per cent), Infosys (up 1.11 per cent), HPCL (up 4.02 per cent), Tech Mahindra (up 8.13 per cent) and Cipla (up 5.3 per cent).

The advance-decline ratio was in favor of decliners. Of the 2,059 stocks traded on the NSE, 737 advanced, 977 declined, and 345 remained unchanged.

Many analysts are expecting that the market momentum will continue and have an upside potential to 11150 - 11160 for Nifty.

Technical Outlook
Sameet Chavan, chief analyst-technical and derivatives, Angel Broking said, “Finally, a bright sunshine is seen in our markets after undergoing a challenging period in last month and a half. We started proceedings with a decent upside gap on the back of favourable global cues. Our benchmark has been on a roll since last four days; but till first half today, broader market looked dejected. As expected, after index surpassing and maintaining above the sturdy wall of 11000, lot of beaten down stocks started rebounding sharply. Since last few days, we have been mentioning the possibility of Nifty surpassing 11000 and its reality now. As far as levels are concerned, a fresh leg of the rally is unfolded and we expect Nifty to immediately hasten towards 11200. In fact, in our sense, we will not be surprised to see index extending this move towards 11400 in next few days. Hence, one should trade with a positive bias and use any dip towards 11000 – 10960 as a buying opportunity.”

Market View
Mustafa Nadeem, CEO, Epic Research said Nifty forms a rising window as it breaks out from the resistance placed at 10970 with a long green candlestick. A decisive breakout is seen on the charts on Nifty along with buying across the sectors. Auto, Media, IT, PSU along with Midcap and small cap have added gains as much as 1 per cent – 4 per cent. This is an indication of improved breadth which was much needed for bulls to clear this hurdle.

“We do not see any resistance for Nifty in short term till 11170-11180 mark. That is an important resistance as a level. Derivatives data was much decisive as compared to what we have seen in the last few weeks. Long built up is now seen at 11300 - 11200 and 11500 as well. While short covering is seen in calls at 11200-11100. That is a good reading since the hurdle we believe also coincides with derivatives reading. Huge short built up is seen in PE across the strikes from 11100-11500. We believe the trend may further increase its momentum with upside potential to 11150-11160 initially.’’