Investors are locking in profits in stocks ahead of the highly volatile Union Budget 2024 session. Global cues remain positive with lower crude prices and optimism over a US Fed rate cut in March. FII selling is dampening investor sentiments. Nifty and Bank Nifty levels to watch out for are 21,000-21,100 and 43,500-44,000 respectively. Expectations for the Union Budget include spending on infrastructure, job creation, tax exemptions, and incentives for various sectors.
Nifty has had a spectacular rally so far, with the benchmark index trading at life-time highs. Most of the key technical indicators including the Advance-Decline Line, 87% stocks trading above their 200-day moving average, and lower India VIX – all point towards an overall positive investor confidence, Aamar Deo Singh, Senior Vice President-Equity, Commodity & Currency at Angel One said.
"Amongst the IT majors, both Infosys and TCS gained 7.4% and 9.6% in December. Going forward, the momentum is likely to continue unless we witness a crack in the US markets. However, investors are advised to trade with caution in IT stocks during the current times, as markets, when trading at record levels, tend to exhibit higher levels of volatility that investors could be uncomfortable with."
Going forward, the Nifty uptrend will continue with the bears fleeing for cover, but at current levels, we may see consolidation and profit booking in some sectors. However, for any significant upward move to occur, index heavyweights, the likes of HDFC Bank, ICICI Bank, and Reliance will need to lead from the front. Levels to watch out for Nifty are 21,150-21,200 as resistance on the upside and 20,650-20,700 as support on the downside.