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On Wednesday 13 April
2016, Bulls made happy before a long weekend. Cheerful bullish trading session
was witnessed today. The Sensex jumped over 500 points, while the Nifty50 index
edged above the key 7850 levels on Wednesday. The Sensex posted its biggest
rally since March 1, while the Nifty hit over three-month high.
A smart bounce in the market that lifted the Sensex
by some 350 points on Monday caught the street surprise. The Sensex ended with a
gain of 481 points at 25627. The Sensex opened at 25358 touched an intra-day
high of 25671 and low of 25358. The Nifty closed with a gain of 142
points at 7850. The Nifty opened at 7777 hitting a high of 7865 and low of 7772.
The rally happened in the last two hours of trade when most people were
expecting the market to close flat after lackluster movement through the
day.
Nifty April futures
staged a smart recovery to settle near 7700 levels. Open interest addition was
seen with an uptick indicating fresh longs. Nifty continues to remain stuck
within the range of 7750-7550. Nifty needs to convincingly break past multiple
resistances placed between 7745-7780 for further upside.
With this rally, the contract has recorded a
new high for this year and appears to have resumed its uptrend that has been in
place since late February. The contract trades well above its 21 and 50-day
moving averages. However, it faces a key resistance as well as 200-day moving
average at around 7900. Traders with a
short-term perspective can make use of dips to buy the contract while
maintaining a stop-loss at 7830 and consider exiting at 7900 levels.
Expectations are now
building up with respect to future growth, which is somewhat positive compared
to what it was two years ago. Next key resistances are at 7930 and 7950
levels. But, a decisive fall below 7800 can bring back selling pressure and
drag the contract down to 7750 and 7730 levels.
Domestic stock
markets will remain closed on Thursday and Friday for public holidays.
Strategy: Make use of dips to initiate long positions
with a stop-loss at 7,830 levels.
Supports: 7,830 and 7,800
Resistances: 7,900 and 7,930
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