Nifty ‘heavily overbought’ after 900-point surge, says Sanjeevv Agarwwal of Alpha Quanntum: Time to book profits? | Stock Market News

Stock market today: Domestic equity benchmarks Sensex and Nifty 50 rallied for the fourth straight session and gained over one per cent, powered by across-the-board buying amid a mixed trend in global equities after the US Federal Reserve maintained its rate cut projections for this year.

Hectic buying in market heavyweights Reliance Industries, Bharti Airtel and IT stocks bolstered investor sentiment. The 30-share BSE benchmark Sensex jumped 899.01 points or 1.19 per cent to settle at 76,348.06, regaining 76,000. During the day, it rose 1,007 points or 1.33 per cent to 76,456.25.

Also Read: Sensex, Nifty 50 extend gains to 4th straight session — 10 key highlights of Indian stock market today

The NSE Nifty surged 283.05 points, or 1.24 per cent, to reclaim the 23,000 mark and finish at 23,190.65. Lower US interest rates make emerging markets, such as India, more attractive to foreign investors by weakening the US dollar and lowering Treasury yields. The Sensex has gained 3.4 per cent in four sessions, while the Nifty 50 has risen 3.5 per cent in four days.

In the current market scenario, Dr Sanjeevv Agarwwal, founder and CEO of Alpha Quanntum has said that the Nifty 50 index is now ‘heavily overbought’ and investors can go for profit booking. According to the D-Street expert, ‘bulls went for a kill’ after US Fed Chair Jerome Powell’s dovish comments.

Also Read: Nifty 50 gains 5% in March; Which stocks should investors buy in a rising market? Here’s what experts say

Dr Sanjeevv Agarwwal on benchmark Nifty 50 index

According to the Alpha Quanntum CEO, the Nifty 50 index has continuously risen for the last four days on short covering by foreign portfolio investors (FPIs) and traders. It has risen almost 900 points in the last four days and has become highly overbought.

“On the back of dovish comments by Jeremy Powell, bulls saw it as a golden chance to go for a kill. It opened with an up gap and crossed the 23,050 level easily. Today, being the weekly options expiry day, made matters worse for the trapped call option writers,” said Dr Sanjeevv Agarwwal.

Nifty 50 technical outlook

However, Nifty is reaching its final target zone of 23,300-23,500. Nifty has made a high of 23,216.70, just below a significant high of 23,235.5 on February 13. Since September 2024, Nifty has never made more than four green candles.

According to Dr Agarwwal, today will be the fourth day of green candles. Being heavily overbought and below the resistance zone makes a good case for profit booking. Nifty’s 200 EMA is 23,400, which will also act as a strong resistance.

Also Read: Expert view: Market correction opens opportunities; focus on growth & valuations, says Equitree co-founder

What should investors do?

The D-Street expert believes there may be strong volatility in the coming days. ‘’One should book profits now and use all the rises to reduce equity exposure. As per the structure, a last ‘g’ leg is left, with a target of around 21,000,” said Dr Sanjeevv Agarwwal. Analysts said the broader market participation and themes such as defence and railways have further eased pressure.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.