How are the Markets Looking ?
The morning market opened on a lower note but quickly regained its momentum. It retested a sloping flag and took off again, closing near 21,900 in red. This indicates a Goldilock situation, where the market is neither too hot nor too cold. It seems like an interim consolidation phase, and the market is expected to continue its upward trajectory.
A higher low has been formed, indicating a series of higher lows and higher highs. This suggests that the trend is very much intact. The base pivot is currently set at 21,500 or 21,450. If the market falls below this level, the trend may become uncertain once again. However, at the moment, there doesn’t seem to be any signs of a downturn.
Nifty Heatmap
Interestingly, the IT sector took a significant lead in the market. Companies like TCS, Infosys, Wipro, Tech Mahindra, and HCL Tech experienced notable gains of 4% to 8%. In addition to IT, infrastructure and oil stocks also performed well. ONGC, a heavyweight in the market, saw a 5.5% increase, while Tata Consumers and LTIM gained 3.5% and 4.5%, respectively. Even State Bank of India, a PSU bank, showed positive growth at 2%.The baton has been passed to the IT, infrastructure and PSU bank stocks today.
Sectoral Overview
The IT sector witnessed an extraordinary rally of 5.1% in just one day. Although its performance over the last month and three months didn’t show significant gains, it is making a strong comeback. PSU banks also recovered, with a growth of 2.8% after a period of losses earlier this month. Over the last twelve months, PSU banks have seen a substantial increase of 31%. Real estate, on the other hand, had the highest performance with a 20% increase in the past month and a remarkable 66.8% over the last twelve months.
The Nifty index itself experienced a gain of 1.1% on January 12th and has recorded a notable 13% increase over the last twelve months. Other sectors such as auto, pharma, metals, private banking, and FMCG showed minimal movement and took a backseat in the market.
Mid & Small Cap Performance
Mid caps closed at another new high at 47,512, while small caps had a dream run, reaching 14,552. These numbers indicate an unimaginable rally that is currently taking place in the market. The duration and extent of this rally are uncertain, possibly continuing until the elections or even beyond. Therefore, it is crucial for investors to follow the trends in the market rather than trying to predict what might happen in the future.
Nifty Bank Overview
While the Nifty Bank index slightly increased from the previous day, it is still trying to break out of the consolidation phase that began in early December.
Highlights – Reliance
Reliance Industries, on the other hand, has taken the lead in the market and experienced a significant 150-200 point increase.
Highlights – Infosys
Additionally, Infosys is also recovering from a 40% fall to nearly 1240 levels after it made a high in 2022. However, Infosys faces a significant resistance range between 1600 and 1680, which needs to be overcome for further gains but there is a sort of consolidation that is happening here.
Highlights -TCS
Tata Consultancy Services (TCS) made a new high in January 2022 after a two-year drawdown and this drawdown is now getting covered.
Highlights – Nifty IT
IT index itself is coming out of a consolidation, after seeing a high in beginning of 2022 and then dropping and now recovering again to those levels.
What should be noted is that investors should’ve gotten in prior to 2022 and ran with the rally and gotten out and sat out of it while it was consolidating. Always look for lumpy returns and get out and then look for lumpy returns elsewhere. This is how you can make an opportunist way of using your money and time effectively.
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