Avoid bold bets

Sensex and Nifty posted gains on Thursday. Positive factors such as the November inflation at a 17-month low of 2.3 per cent and October IIP growth rate of 8.1 per cent helped the indices to post gains. Easing inflation gives room for the RBI to decrease interest rates.

The Sensex rose 150 points, or 0.42 per cent to settle at 35,929.64. The Nifty 50 rose 53.95 points, or 0.50 per cent, to settle at 10,791.55. Among secondary barometers, the BSE Mid-Cap Index rose 0.82 per cent and BSE Small-Cap rose 0.65 per cent.

Among the sectoral indices on the BSE, Consumer Durables was up 1.4 per cent, Capital Goods, 1.27 per cent  and Realty, 1.19 per cent.

Technical view

Sameet Chavan, chief analyst-technical & derivatives, Angel Broking, said: “Despite a lot of uncertainty, the last three sessions have been good for our markets. For the day, we had mentioned a crucial range of 10,800–10,833. The index saw some profit booking precisely after testing the higher end of the range. Let us understand why this level has some significance. On the hourly chart, we had a breakdown from this crucial swing low on December 5. Hence, this previous support is now acting as a resistance. Secondly, we can see a convergence of two important trend lines on the daily chart precisely around the same level. Hence, unless we see the Nifty breaking out convincingly from this wall, traders should avoid aggressive bets in the market. Post-the breakout, we may see further leg in the upward direction getting unfolded towards 10,940 and above. On the downside, 10,749 and 10,700 are now seen as key support levels.”

Market view

Jayant Manglik, president, Religare Broking, said: “Markets settled higher for the third consecutive session, thanks to firm local cues and supportive global markets. It opened gap up as participants took note of robust IIP data and ease in retail inflation. Though it made multiple attempts to move higher thereafter profit taking at the higher levels capped upside.

“Markets have recovered significantly in the last three sessions and reached closer to the previous high. We suggest participants to book some profit and wait for consolidation.”

—Ashwin Punnen