India’s benchmark stock index Nifty 50 may rally to 18,400 by August-end on improving macro events, according to technical analyst Gautam Shah.
“People are concerned that we’ve run up a lot and there is room for some correction,” Shah, founder and chief strategist at Goldilocks Premium Research told BQ Prime’s Niraj Shah. “But when you get such wonderful global cues from U.S. markets and European markets, India cannot get into a corrective phase on a stand-alone basis.”
The 50-share index may pullback by 300-500 points from the current levels, Shah said. However, investors and position traders should continue to stay invested, he said. The Nifty 50 has closed at 17,825.25 on Aug. 16.
“I think 17,400 and 17,100 are now solid support for the rest of August,” he said, “if everything goes as per plan 18,400 and beyond is definitely coming.”
The tech-heavy Nasdaq and S&P500 have been rallying in the last four weeks on better than expected earnings and upbeat economic data. Oil, too, pared losses on increased expectations from Iran nuclear deal.
There is convergence of multiple technical studies at 17,750, he said. Hence, if the market does close above the 17,750 mark in the next few trading sessions, he said, it would suggest that the market is “opening up further upside.”