Market Rally Expected to Continue, Experts Predict Consolidation Phase

Considering the impressive rally led by technology stocks in the market last Friday (January 12), experts suggest that the market is poised to reach the 22,000-22,100 zone in the coming days before potentially entering a consolidation phase. Support is expected to move slightly higher to the 21,800-21,700 area, while the crucial support level remains at 21,500.

On January 12, the benchmark indices achieved a record closing high, with the Nifty 50 gaining 247 points to reach 21,894.5. The daily charts exhibited a bullish candlestick pattern, indicating a formation of higher highs and higher lows for yet another session.

The BSE Sensex climbed 847 points to 72,568, but the broader markets underperformed frontline indices as the Nifty Midcap 100 and Smallcap 100 indices gained 0.4 percent each.

Stocks that recorded healthy gains and better than benchmarks & broader markets included HCL Technologies, Firstsource Solutions, and IRFC. HCL Technologies saw a decisive breakout of horizontal resistance trendline and climbed 3.8 percent to end at a record closing high of Rs 1,540.8. Firstsource Solutions also participated in the IT rally, rising 10.4 percent to Rs 210, the highest closing level since October 19, 2021. IRFC extended its uptrend for a third consecutive session, jumping 6 percent to end at a record closing high of Rs 113.4.

Rajesh Palviya, Head of Technical & Derivatives Research at Axis Securities, recommends investors buy, hold, and accumulate these stocks. He suggests an expected upside of Rs 123-130 for IRFC with a downside support zone of Rs 108-103 levels. For Firstsource Solutions, he expects an upside of Rs 230-250 with a downside support zone of Rs 197-190 levels. And for HCL Technologies, he suggests an expected upside of Rs 1,630-1,700 and a downside support zone of Rs 1,490-1,450 levels.

Experts believe the market rally will continue and reach new levels before entering a consolidation phase. The Nifty 50 and BSE Sensex are expected to reach the 22,000-22,100 zone. HCL Technologies, Firstsource Solutions, and IRFC are among the stocks that recorded healthy gains. Rajesh Palviya from Axis Securities recommends investors buy, hold, and accumulate these stocks.