Nifty hits new milestone of 20,000

Nifty started the week on a positive note and continued its uptrend to achieve a new milestone. The index rallied to surpass the 20000 mark for the first time ever and ended around its highest point.

It has been a fabulous run for our markets in last few months where we witnessed an up move in indices as well as the broader markets, which are signs of a strong bull market. Post the recent correction in the index, the index resumed its uptrend at the start of this month and the Nifty has now hit a new milestone of 20000 for the first time ever. The data remains optimistic as the momentum readings which recently gave a positive crossover remains in buy mode. Also the FII’s have increased their long positions in the index futures segment where they started the September series with 50 percent long positions and have now around 58 percent positions on the long side. The Clients section has about 50 percent ‘Long Short Ratio’, and thus there no short formation seen. IN the options segment, the coming weekly series has highest open interest at 20000 call options. If the index sustains above this, then we may see short covering by call writers which would support the momentum. On the flipside, open interest addition was seen in 19900 and 19800 put options. As mentioned in our earlier articles too, we have been anticipating the Nifty target around 20150-20200 which is the range as per the retracement theory. Hence, traders are advised to continue to trade with a positive bias and look for buying opportunities. The immediate supports for Nifty are placed around 19830 and 19700.

Although the trend remains intact, traders are advised not to get carried away now and trade with proper risk management as the midcap and the small cap indices are in a highly overbought zone. Although there are no signs of reversal yet in them, it’s better to manage risk properly rather than chasing stocks at higher levels. Even partial profit booking at current levels in mid and small cap stocks shall be a good strategy to ponder on.