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By Vikas Jain Where are WeNifty 50 has made a strong move over the past one month (2.6 per cent away from its all-time high) with broad-based momentum across sectors and stocks with banking index leading the rally to an all-time high near to 30,000 levels.
The energy sector also scaled a new high with sustained up-move with stocks gaining in the range of 10-15 per cent over the past one month despite crude prices being up by 25 per cent year-to-date (YTD).
Mid-cap and Small cap indices have gained 6.2 per cent and 10.2 per cent, respectively, in March, outperforming other major indices.
Meanwhile, Nifty IT and auto indices have remained flat-to-negative to decline by 1.1 per cent and 0.2 per cent, respectively, for the month.
What is in Store Nifty50 has completed a one-month positive stance since the bottoms on February 19 from 10,600 levels.
One can expect some minor profit booking till 11,280-11,300 levels which is the current month weighted average.
The up-trend would resume thereafter with other sectors like FMCG, IT, metals and auto to lead the trend for a new high near to 11,800 levels over the next two months.
As we are in the derivatives expiry week, we are expecting some rollover volatility in individual sectors and stocks on the expiry day.
What can Investors Do We continue to remain positive on the markets and believe the sharp underperformance in sectors like FMCG, IT, metals and auto provides an opportunity to invest at current levels as risk reward ratio is favourable.
For the banking sector, one should wait for some correction.
With resistance of 30,000 and index stocks from the banking sector being in overbought zone, we expect some profit booking from current levels.
The author is senior research analyst, Reliance Securities.
