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As Nifty closed above the 10,750 level on Monday, it also formed higher high and low for the fifth straight session. Chandan Taparia of Motilal Oswal Financial Services said Nifty has to hold above 10,600 level to extend its move towards 11,000 level while on the downside support has shifted higher to 10,550 and then 10,450 levels.

The domestic equity indices had a much buoyant and better-than-expected start to the week, as they opened higher, got stronger during the session and ended with decent gains. While the US markets were shut on Friday, Asian markets opened higher on back of strong gains in Dow futures. Regardless of any other thing, liquidity continued to propel markets higher without showing any intent to correct. After testing a level just above 10,800, Nifty came off a bit, but still ended with a decent gain of 156 points, or 1.47 per cent.

The domestic equity market moved higher during the week gone by on hopes of a Covid-19 vaccine coming to everyone’s rescue earlier than expected. The bourses across the world are riding high despite unstable economic growth only on the hope of early availability of a vaccine. Another round of shutdowns in a few countries is frightening, but hopes of a drug/vaccine are keeping the markets upbeat.

The aversion to risks in the stock market, which had surged to the highest levels in over a decade in March following the Covid-19-related worries, is steadily on the wane. The Volatility Index (VIX) — a measure of option traders’ perception of near-term risks — has fallen to 25.77 on Friday, its lowest since March 6, from 86.6 on March 24 as the rebound in the markets aided by softer concerns over the pandemic made investors and traders return to Dalal Street.

Indian equity benchmark Nifty closed in the green for the fourth consecutive day, ending at a four-month high level, tracking positive global cues. The Sensex closed 466 points, or 1.29 percent, up at 36,487.28, and the Nifty ended 156 points, or 1.47 percent, up at 10,763.65. Positive macroeconomic data and hopes of a vaccine boosted sentiment that the global economy will bounce back from an expected recession this year.

Investors need to be very careful while buying mid and smallcap stocks and they should know what they are buying. They should clearly stay away from penny stocks at this juncture, Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities, says in an interview to Moneycontrol’s Kshitij Anand. Edited excerpts:

The aversion to risks in the stock market, which had surged to the highest levels in over a decade in March following the Covid-19-related worries, is steadily on the wane. The Volatility Index (VIX) — a measure of option traders’ perception of near-term risks — has fallen to 25.77 on Friday, its lowest since March 6, from 86.6 on March 24 as the rebound in the markets aided by softer concerns over the pandemic made investors and traders return to Dalal Street.

The domestic equity market further narrowed its trading range on Friday, as the indices oscillated in a very limited range throughout the session to end with modest gains. Nifty opened on a mildly positive note and stayed in the positive territory for the entire session. However, without signalling any directional trend, the index kept on moving back and forth in a 60-point range. The high point of the session coincided with the level which was the confluence point of several major resistances.

Last week, the market continued the winning momentum for the third consecutive week. The 30-share BSE Sensex advanced 850.15 points or 2.41 percent. Here's what analysts have to say about this week.

"Technology stocks have always been in vogue, as they have generated returns consistently, and have less cyclicality. Also, in bear markets and stress times, investors prefer parking their funds with large tech companies as a defensive bet," Sumit Bilgaiyan, the founder of Equity99, said in an interview to Moneycontrol's Sunil Shankar Matkar.

It would be pertinent to gauge the economy from managements’ commentary after Q1FY21 numbers, which would better portray the near-term demand trajectory and roadblocks if any, Umesh Mehta, Head of Research, Samco Securities, said in an interview with Moneycontrol’s Kshitij Anand.

Nifty50 on Friday climbed for the third session in a row and topped the 10,600 mark on a closing basis. The day’s trading was marked by rangebound movements, suggesting that the index was consolidating recent gains. The 50-pack formed an indecisive candle on the daily chart, but a strong bullish candle on the weekly chart.

The Sensex and Nifty have rebounded 40 per cent from their four-year lows in March, erasing majority of the losses in the past three-and-a half months, but beneath the surface, the sentiment remains grim. Out of the BSE 500 index stocks, 63 per cent are still below 200-Day Moving Average (DMA) — a long-term trend indicator, suggesting the equity market bounce has been driven by a smaller set of stocks.

Nifty extended its winning streak into a second consecutive session and formed a bullish candle on the daily chart on Thursday. Analysts said the short-term trend for the index remains positive. Deepak Jasani of HDFC Securities said technically with Nifty moving up further after breaking out of the 10194-10410 range, the underlying trend remains upward.

Short covering continued in Indian stocks for the third day in a row as Nifty continued to advance and ended the session with gains. The expiry of weekly options continued to rule to roost, as it dominated the trend for the entire session. Maximum Call open interest in Nifty shifted from strike price 10,500 to 10,600 and it ensured that the index moves past 10,500 level and settle below the 10,600 mark.