A morning walk down Dalal Street| Strong momentum may take Nifty towards 11,200-11,400

The smart rally indicated that momentum strengthened further, which may take the Nifty to new targets – 11,200 and then 11,409 levels, experts said, adding the selling pressure could be possible if the index breaks and closes below 11,049 levels.

No Monday blues on D-Street that is for sure. Both Sensex and Nifty50 climbed crucial resistance levels on Monday to reach their highest level in 2019.

The S&P BSE Sensex closed above 37000 for the first time since September 19, 2018 while Nifty50 reclaimed 11,100 levels for the first time since September 21.

Almost all the sectoral indices participated in the rally and the broader indices too showed noticeable buying. The S&P BSE Mid-cap index rose 1.96 percent while the small-cap index gained 1.6 percent in trade massively outperforming benchmark indices.

The Nifty has moved above the immediate resistance of previous swing high of 11,118 levels recorded on 7th February 2019 and closed higher. This is positive indication for the bulls, and as long as the index holds above 11000, next target to watch out would be 11200-11300.

The rupee on Monday advanced by 25 paise to close at 69.89 against the dollar in line with a strong rally in domestic equities, reflecting positive investor sentiments amid hopes that the NDA government will get the second term.

On the institutional front, FPI were net buyers for Rs 3810 crore while DIIs were net sellers to the tune of Rs 1955 crore, according to provisional data.

Big News:

The mother of all events is finally here ‘Lok Sabha’ elections are just a few months away, but the action in the equity market has already begun. We have already started witnessing the action in banks, autos, as well as capital goods sectors.

A historical analysis of past 3 general elections reveals that volatility sharply rises before Lok Sabha elections election years.

And, historically, Capital goods, Banks (private and PSU) and Autos and auto have performed well during an election year, Elara Capital said in a note.

Lok Sabha elections will begin on April 11 and polling would be held over seven phases till May 19, followed by counting of all votes on May 23, the Election Commission announced the dates over the weekend.

Technical View:

Nifty formed a bullish candle on the daily charts

The smart rally indicated that momentum strengthened further, which may take the Nifty to new targets – 11,200 and then 11,409 levels, experts said, adding the selling pressure could be possible if the index breaks and closes below 11,049 levels.

Three levels: 11049, 11180, 11200

Max Call OI: 11500, 11400

Max Put OI: 11000, 10800

Technical Recommendations:

We spoke to Religare Broking and here’s what they have to recommend:

Kotak Mahindra Bank Limited: Buy| Target: Rs 1330| Stop-Loss: Rs 1210| Upside 6.4 %

Aurobindo Pharma Limited: Buy| Target: Rs 820| Stop-Loss: Rs 715|Return 8.2 %

Marico Limited: Buy| Target: Rs 362| Stop-Loss: Rs 337| Upside 4.6%

Disclaimer:-The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.

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