Hot Stocks | Nifty may rise further; use this opportunity to book profits

After three weeks of consolidation, the market managed to confirm a breakout, and fortunately for the bulls, it’s on the higher side.

The Nifty spot broke out above 12,000 during the week to register a new lifetime high of 12,158. So far, the index is trading with a gain of around 2 percent this week.

On the other hand, the Nifty Bank index too reached a new life high above 32,000 and is trading with a gain of more than 3 percent from its previous week’s close.

Above the 12,000-mark, we had a target of around 12,200 for the Nifty, which has almost been met. Now at this juncture, we are seeing that the index is hovering near the potential reversal zone of a bearish harmonic AB=CD pattern.

Also, on the larger degree chart, we can notice that there is a long-term rising trend line placed near the 12,400-mark, which is formed by joining the important tops of 6,357 and 11,760.

So, we continue to have a view that although the market might remain positive for some more time and the index could rise further, this opportunity should be used to start booking short-term profits in long positions in the coming weeks.

Another reason for this view is that there is a negative divergence in the weekly RSI of the Nifty spot, and this could trigger some consolidation or profit-booking.

Going ahead, it is better to remain stock-specific and go for stocks that have a fresh potential to rise rather than the ones that are overbought.

On the downside, 12,000 would now act as a sheet anchor for the market. A move below this level could start the corrective move sooner than expected