Nifty at 12,000! What experts predict about stock market on first day of Financial Year 2019-20

Nifty Prediction for April 2019: On account of opinion polls finding Prime Minister Narendra Modi-led NDA government coming back to power post-Lok Sabha Elections 2019, the market experts predict the index Nifty may touch the 12,000 levels soon. In the wake of the opinion polls, Foreign Institutional Investors (FIIs) have also pumped more money into the Indian equity markets  Pritesh Mehta, Senior Vice President - Research, YES Securities (India) Limited said, "Nifty internals suggest that recent rally has been broad-based compared to previous ones as 29 stocks from the index have outperformed Nifty so far – A perfect ingredient for a sustained rally. We expect Nifty to continue its northbound journey and attempt 12,100 levels as per extension calculations, which coincides with three-digit Gann number of 12,100."

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Terming the recent move as a pre-election rally won’t be a right approach as time-wise correction prior to the recent explosive move has set the wheels in motion for higher targets irrespective of the election verdict. "Indian markets had been devoid of sideways consolidation for the entire 2018. Index on several instances had strong trending moves (i.e. Fall post 2018 budget, EMs sell-off, IL&FS led decline or heavyweights led recovery in July & August). However, it lacked period of time-wise correction. And in every healthy market such phases are of utmost importance. We got that much required sideways phase between November 2018 & February 2019. During this period, it digested several domestic as well global news flow before rallying higher and outperforming global peers," said Pritesh Mehta of Yes Securities (India) Limited.

Modi Factor behind positive sentiments

Prakash Pandey, Director & Head of Research at Fairwealth Securities said, "Positive FII sentiment towards the Indian equity market is because of the rise in speculations that Narendra Modi led NDA Government coming back to power post the Lok Sabha Polls as a majority of the Opinion POlls have found this in their findings."

Mehul Kothari, Senior Technical Analyst — Equity at IndiaNivesh Securities, said, "The index Nifty is hovering around its recent peak of 11,573 and looking at the risk-reward ratio the condition seems to be lucrative to go short. If the index failed to breach the peak then it could retest 11,300 to 11,200 zone," adding, "The domestic markets maintained its upside journey after a short breather in the previous week wherein the benchmark indices closed with another significant gain. The index Nifty spot not only cleared the hurdle of 11,573 but also managed to close well above 11,600 mark. Now the ‘Doji’ formation which we discussed in our previous report has been negated. Thus, any follow up buying from here on could help the index to retest its life high of 11,760 in the April series."

Kothari added, "We would enter an uncharted territory where another 200 to 300 points upside in Nifty cannot be ruled out. On the downside, 11,450 would now act as an intermediate support for the markets. A breach of the same might halt the upside momentum which can drag the index towards 11,300-mark. Traders are advised to avoid over-leveraged positions and maintain strict stop loss on positional trades since the markets are now entering the month of general election wherein we might witness surge in volatility."

Nifty was seen at 11,680 in early hours on Monday (April 1), which is also the first day of the new financial year 2019-20.