Stock market today: Indian stock markets surged on Monday, fueled by positive sentiment regarding the government’s proposed GST reforms intended to bolster economic growth in the nation.
The markets experienced a significant increase on Monday, with the Sensex climbing by over 1,000 points and the Nifty 50 surpassing 25,000, as anticipation around GST reforms emerged as a notable factor, along with a sovereign rating upgrade and reduced worries about Russian oil supplies.
The Nifty 50 was on track for its strongest performance in three months, while the Sensex was poised for its best day in two months.
Despite this, Indian indices have lagged behind global markets throughout the year, with the Nifty 50 increasing by 5.5%, in contrast to gains of 17.4% in Asia and 18.3% in emerging markets.
Market Views – Vinay Rajani, Senior Technical and Derivative Analyst, HDFC Securities
Following a gap-up opening of over 300 points, the Nifty 50 extended its gains to 25,022 in the early morning session. This move pushed the index above its previous swing high resistance of 24,956 and reclaimed its level above the 50-day DEMA, now around 24,800. The rally was primarily led by consumption-related stocks.
The Nifty 50 formed a strong base near 24,340 over the past two weeks, which needs to hold for a bullish reversal to be confirmed. The 24,750-24,820 band, where the 20 and 50-day DEMAs coincide, is now a support zone. By testing 25,003, the Nifty 50 has completed a 50% Fibonacci retracement of the entire fall from the recent swing high of 25,669 to the recent swing low of 24,337. Sustained trading above 25,000 could push the index further towards the 61.8% retracement level of 25,160.
FIIs’ long-to-short ratio in index futures at the beginning of the day stood at extremely oversold level of 0.09. In other words, out of total positions of FIIS’ in the Index Futures segment, more than 92% is on the short side.
There are four instances (After March 2020) where FIIS long to short ratio at the beginning of the series stood at or below 0.15 (30-May-2024, 26-Oct-23, 29-March-2023 and 29-Sept-2022). If we were to see performance of Nifty 50 in the subsequent series, Nifty 50 had moved up in all the four series and average gain of Nifty 50 was over 7%. Therefore, considering the historical evidence, there are higher possibilities of a short covering to continue in the market in the days to come.
ETF Picks
Buy Nippon India ETF Nifty PSU Bank BeES (78) | Target Rs. 82, 84| Stop-loss Rs. 75
ETF Price has recently found support at its 200 DEMA followed by positive crossover on 50 DEMA. PSU Bank index has been got more relative strength as a sector in the recent down trend of the market. Daily RSI has given positive crossover and reached above benchmark level of 50.
Buy Nippon India ETF Nifty Infrastructure BeES (937) | Target Rs. 990 | Stop-loss Rs. 900
Last week, Infrabees ETF broke the 6 week losing streak and bounced back. Index has now reclaimed its level above 20 DEMA. Primary trend of the index has been bullish with higher tops and bottoms on weekly and monthly charts.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.