Can Nifty hit record highs in 2019? Possible, but could be touch and go

The Nifty that reclaimed 11,800 levels on October 29 is 2.5 percent away from surpassing its record high of 12,103 registered in June 2019.

Experts feel that the Nifty can find a new high in the next few weeks, but it could be a touch-and-go moment.

The sustenance of the up move will depend on government taking fresh policy measures along with earnings recovery. On the global front, Fed outlook on rates, trade war between the US and China, uncertainty around Brexit, foreign investors' activity and crude oil movement will dictate the trend.

Indian markets rallied on October 29 after media reports said the government was planning a series of tax alignments for equities in the coming weeks to further boost investor sentiment.

"Technically speaking, Tuesday's up move is signalling that Nifty has resumed its uptrend and if it sustains above its logical resistance of 11,810 for a couple of days then retest of lifetime highs present around 12,103 can be expected," Mazhar Mohammad, Chief Strategist, Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.

Mohammad added that on the fundamental side, it would be important to see how the government would compensate itself for a shortfall in revenue following the corporate tax cuts. The government's selling of public sector assets would also be watched closely.

"If their aggressive plans in this regard gets converted into reality without undue delays then markets can really catch fire on the upside," he said.

Sustainable new life highs can be an indication that market breadth will improve to further strengthen the bull market.

But, in the current environment, new highs have no special significance, as a handful of stocks are driving the index up, with a larger part of the market still in a bear phase, say experts.

But, technically, the index's journey into unchartered territory could get easy, as it managed to close above 11,700 on October 29. If it sustains above 11800, the rally should pick momentum.

"We expect the index to resolve out of intermediate hurdle of 11,700 and challenge the lifetime high of 12,100 in the coming months. The ongoing healthy consolidation post a sharp up move of around 10% signifies a robust price structure, aiding the index to set the launchpad for an acceleration of upward momentum towards 12,100," ICICI Direct said in a report.

"In the process, we do not foresee the index breaching the key support threshold of 11,300. Therefore, dips should be capitalised to accumulate quality stocks amid the Q2FY20 earning season," it said.

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