While the markets are witnessing positive momentum, analysts are uncertain whether it will sustain.
"The equity markets are having positive momentum, but it looks very exhausted… People need to be very cautious and think from a trader's point of view than an investor," Jai Bala, founder and chief market technician at Cashthechaos, told NDTV Profit on Wednesday.
“The markets are at their final stretch; that's why we see sector rotation... It tries multiple combinations and later finds a lack of depth or more depth on the selling side… When markets are stretched, then we need to scale down our position sizing,” he said.
Global and domestic cues are looking good for the market, according to Pankaj Pandey, head of research at ICICI Direct. "Our sense is that the positive momentum is going to sustain in the markets, probably to levels like 22,200."
"There will be a correction in between, but in general, we expect the markets to keep doing well for the next month," Pandey said.
The benchmark indices continued to rally for the fourth consecutive session on Wednesday and closed at an all-time high due to gains in the shares of financial services and IT stocks.
The NSE Nifty 50 ended 213 points, or 1%, higher at 21,654.75, while the S&P BSE Sensex closed 702 points, or 0.98%, up at 72,038.43, thereby ending above the 72,000-mark for the first time.
Intraday, the Nifty and Sensex hit life-time highs of 21.675.75 and 72,119.85, respectively.
Amid the backdrop of the cement sector's optimistic run on Wednesday, Avinash Goraskshakar, director of research at Profitmart Securities Pvt., said that many companies like UltraTech Cement Ltd., Ambuja Cements Ltd. and India Cement Capital Ltd. will benefit since a greater degree of pricing power is visible currently.
“…October to March, the companies usually ramp up their production along with a rise in prices since post-monsoon construction activities take off,” he said.
As UltraTech Cement enjoys a pan-India presence, investors should accumulate more of its shares when they notice any dip, Goraskshakar said.
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