Nifty has seen continuous momentum over the past couple of weeks as it has crossed the 11,000 mark. The index has seen positive performance across various sectors such as financials, banking, IT, and auto, indicating the bulls have taken charge of the market. But technical analysts have warned that Nifty is over-extended on the charts and a pullback could be on the cards over the coming week.
Investors must thus maintain caution and be aware of the risks in chasing up moves. While the rupee appreciating against the US dollar is likely to push the index higher, analysts suggest that one should wait for a consolidation phase before making any investments. It would be wise to stay on the sidelines and wait for some correction to come to the market after the recent run-up.
The Indian economy is on the mend, and the stock market has responded to this resurgence positively. Despite the short-term correction that is likely to occur, the overall trend for the markets looks bullish.
In terms of sectoral stocks, IT and banking stocks are likely to remain in focus over the coming week. Auto stocks have seen strong momentum of late as foreign investors have shown increased interest in the sector. Moreover, telecom stocks have remained subdued.
Overall, investors must keep in mind that markets may remain volatile in the near-term. Chasing up moves could be treacherous and investors must use caution while making any investments over the week. It is also important to note that a pullback could be around the corner and a cautious approach would thus be prudent.
‘NIFTY On Upsurge: Avoid Chasing Gains As Consolidation Set To Unfold’
