New bullish triggers, improving volumes, attractive valuations, strong macro- and micro-economic scene and a strong inflow of funds could drive the Sensex to 9000 levels in the near term, according to experts.
J M Morgan Stanley in a report said that "the candlestick patterns formed on the daily charts throughout last week have been positive indicating continuing strength. With no signs of topping out as yet and given the fresh bullish pattern on the weekly charts, the uptrend is only going to accelerate."
This, said the merchant banker, will see the Bombay Stock Exchange's 30-share sensitive index -- the Sensex -- touch new highs.
"With most studies continuing to present a picture of strength, we feel there is a lot of upside even from current levels. There are still no signs of topping out and hence the bulls can comfortably hold on to long positions. The fact that the indices have yet again consolidated/corrected and moved up is a very healthy sign for the uptrend as the weak hands keep moving out while strong hands further strengthen their position," said JM Morgan Stanley.
"For the short-term, the Sensex gets support at 8580 and 8480 and any reaction close to which would be a buying opportunity (2585 and 2550 on the Nifty). Resistance seen at 8750 and 8830. The PSU and healthcare sectors look like short-term outperformers. The rally in banking, technology and capital goods sectors is also likely to continue," JM Morgan added.
The merchant banker also expects another rebound in the mid-cap sector this week.
Meanwhile, JP Morgan Chase, another global brokerage, believes that Indian valuations are neither too good nor too stretched currently.
The brokerage said that India's stellar performance over the last 30-odd months has inflated valuations, but these are 'not extended.' What is in favour of the country, however, is its strong fundamentals which are ensuring major FII inflows.
The outlook of most marketmen, over the short term, remains positive that the markets will scale 9000 levels soon.