Continuing
recent bearish momentum, the Nifty opened a gap on the downside and attempted
to extend further down. It broke the 15700 level on an intraday basis but
received strong support on the bottom. Consequently, the index staged a strong
recovery towards the end of the session, leading to a bullish outside bar
formation on the daily chart. Domestic indices reversed trend and traded
with profits, led by export-oriented sectors such as pharmaceuticals and IT,
which saw buying interest as the rupee fell to record lows. Favorable exit poll
results from the state election and weak buying among mid and small caps also
helped boost optimism in the domestic market. Markets staged a spectacular
rebound as Nifty closed more than 300 days at a low. A bullish engulfing
pattern has formed on the daily chart, indicating a near-term positive
reversal. Indian benchmark indices closed higher on March 8 amid high volatility
led by real estate, IT and pharma stocks. Finally, the Sensex rose 581 points
to 53424 and the Nifty rose 150 points to 16013.
The hourly momentum indicator is showing positive divergence,
which is helping the bulls recover. The overall structure shows that the Nifty
has found support near the 61.8% retracement of the previous April-October
rally, as well as near the bottom of a falling channel drawn for the
January-March decline. Thus, 15900-15800 is a crucial support zone for Nifty.
Going forward, the index is expected to test 16100 up, beyond which the
short-term range will move back up.
Resistance: 16100, 16200, 16300
Support: 15900,
15800, 15700
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