Stock selections of the day: ‘Expect consolidation earlier than next leg of rally’
The week started with a bang on Monday as we noticed a gap-up starting first, followed by a massive intraday, setting the tone for the rest of the week.
The following days did not disappoint now; in reality, robust optimism was seen everywhere. With this, Nifty controlled to clock its most significant weekly gains within the closing four months.
Aside from the heavyweight banking index, the foremost charioteer for this captivating rally became none. We witnessed a stellar flow during the week to sign in clean highs within the manner.
Eventually, each index noticed some slight earnings reserving in the direction of the fag end of the week, and it was obvious after seeing such a relentless rally.
In our feel, the degree turned into the set for this form of the pass when Nifty convincingly handed 10,900 ultimate Tuesday. What encouraged us was the outperformance of mid and small-cap baskets, which started a few days before this.
And then, the primary motive force, ‘banking’, began showing its dominance. Considering all this evidence, we have been vocal about this getting prolonged closer to 11300 – 11400, which became the higher give-up of the ‘Megaphone’ sample.
The index has reached this junction, and because of robust exuberance, Nifty prolonged its march closer to the eleven,500-mark.
Now, we’re at a kissing distance from this determination, and it’s a count of time; the index would indeed see this range.
But, the factor is, will some exhaustion be seen, or could the index keep heading closer to all-time highs? We’re at essential technical ratios, and thinking about the pace of the pass, the threat-praise for clean trader has gone for a toss now.
We feel that a few forms of consolidation would now be seen for some time before unfolding the next leg of the rally. By no approach should one go short. Alternatively, it is time to be selective regarding character shares, and they have to be executed with the right money management.
