Sensex rallies over 3% for the week, on track to hit 28K, say technical experts

NEW DELHI: Easing concerns over below normal monsoon, dovish commentary from US Federal Reserve pushed Indian markets higher this week. The S&P BSE Sensex ended 3.3 per cent higher, while Nifty closed 3.03 per cent up for the week ended June 19.

The 50-share NSE index closed 50.35 points higher or 0.62 per cent at 8224.95 on Friday. The S&P BSE Sensex ended 200.34 points higher or 0.74 per cent at 27,316.17.

According to technical experts, market is close to bottoming out and most likely benchmark indices are headed for big gains in the next few weeks, possibly closer to June expiry.

"I have a Sensex strategy which investors can deploy at current levels. We have a buy at about 27300 which we have already crossed. Now, I am looking at a first target of 27650 on the upside on the Sensex," he adds.

Thacker further explains that if we look at the Sensex chart and try to work out what could be a slightly positional target on the Sensex we are looking at levels of around 28000 to about 28200 on the upside.

"I would continue holding long positions, but if somebody has bought with the very short term perspective over the last one-two days then around 27650 could be good levels to at least take partial profits and trade the stop loss," he adds.

The broader market managed to outperform benchmark indices in the week. The S&P BSE Midcap index rose 3.7 per cent, while the S&P Small Cap index rallied 3.5 per cent for the week ended June 19, 2015.

Top sectoral indices on BSE include - Oil & gas (up 4.9%), auto (4.9%), consumer durable (up 4.7%), healthcare (up 4.5%), and capital goods (2.9%).

Top Nifty gainers include stocks like - Reliance Industries (up 12%), M&M (up 9.4%), ONGC (up 6.2%), Lupin (up 5.5%), Maruti Suzuki (up 5.4%), and Bajaj Auto (up 5.3%).

Top Nifty losers include stocks like - Vedanta (down 4.8%), Power Grid (down 3.7%), Bank of Baroda (down 3.3%), BHEL (down 2.8%), Tech Mahindra (down 1.3%), and Coal India (down 0.6%).

Experts feel that if Nifty managed to hold onto levels of 8200-8250, would form a strong floor for the markets and would create a strong platform for the index to move higher from those levels.

"Let me give some credit to IMD for a change that a market which was not bottoming out because of their prediction has now bottomed out. Levels of 8250 will be crucial for Nifty to cross, and once it sustains we could call it as a strong floor," says Ashwani Gujral, Fund Manager, Ashwanigujral.com.

Levels of 8200-8250 on Nifty will act as a good floor for the market. And, chances are that oil and gas stocks could play a big part throughout this rally, because banks and IT have not really gotten off the block.