Current market price: ₹513.65 | Buy range: ₹495-518 | Profit goal: ₹610 | Stop loss: ₹470 | Timeframe: 2-3 months
Current market price: ₹6,174.90 | Buy range: ₹6,000-6,200 | Profit goal: ₹7,700 | Stop loss: ₹5,500 | Timeframe: 2-3 months
India’s benchmark stock index Nifty 50 extended its rally for a second consecutive session following a sharp fall in Brent crude oil prices and US President Donald Trump’s tariff concessions.
Crude oil prices fell sharply after the OPEC+ bloc of major petroleum exporting nations announced plans to gradually ease voluntary production cuts.
Taking cues from global markets, the Nifty 50 started the trading session on 6 March with a gap-up opening at 22,476 points. After that, it tested 22,250 and continued its bullish momentum from the previous day’s session to close near the day’s high at 22,544. As a result, the Nifty 50 formed a bullish candle with a long lower wick on the daily chart.
Among major sectoral indices, barring the Nifty Realty index, all others closed higher. The market breadth remained positive, with an impressive advance-decline ratio of 3:1, reflecting strong buying interest across the board.
From a technical perspective, the Nifty 50 closed above 22,500, which was a strong resistance area. The 14-day relative strength index (RSI) bounced back from the oversold region and is trending upward, positioned around 41. Additionally, the moving average convergence divergence (MACD) indicator is trending negatively below the zero line.
Following the O’Neil’s methodology of market direction, MarketSmith India shifted the market status to a ‘Rally Attempt’ from a ‘Downtrend’ on Wednesday. From here, we would prefer to see a follow-through day or Nifty scaling a new high before upgrading the market to a ‘Confirmed Uptrend’.
If this occurs, the focus will be on stocks that show the best relative strength with strong accumulation. Stocks that recover the quickest often lead the next run. On the flip side, if Nifty breaches its recent low of 21,965, the market status will revert to a ‘Downtrend’.
Looking ahead, the ongoing upside bounce-back may drive the index toward 22,800, followed by 23,000 in the coming few days. On the flip side, immediate support is placed around 22,250-22,200.
On Thursday, the Bank Nifty opened on a negative note. However, it later started gaining its buying interest, pushing the index higher. The index formed three consecutive candles on the daily chart, suggesting a potential continuation of this upward momentum.
Nonetheless, it is still trending below its 21-DMA, which is the key level to watch. In the session prior, the index opened at 48,760, fluctuated within a range of 48,839.10-48,299.40, and eventually closed at 48,627.70, reflecting sustained buying interest.
The 14-day relative strength index is moving gradually upward and is currently positioned around 43-44. Meanwhile, the moving average convergence divergence is trading with a negative crossover and remains below its central line, indicating continued weakness in momentum.
Following O’Neil’s methodology of market direction, MarketSmith India shifted the Nifty Bank’s market status to a ‘Rally Attempt’ from a ‘Downtrend’. Tuesday’s session was considered day one of an attempted rally, as Nifty Bank closed in the green. The index has not breached the correction low of 47,841.30 since day one.
Hence, Thursday’s action qualifies as day three of an attempted rally. From here, we would prefer to see a follow-through day before shifting the market to a ‘Confirmed Uptrend’. Should this occur, the focus will be on ideas that show the best relative strength with good accumulation.
This major sectoral index is trending below all its key moving averages in the range-bound zone of 48,000-50,000. Moving ahead, 49,000 is a key level to watch, as crossing and holding above this level may lead the index toward 50,000-50,500 in the coming weeks. On the downside, strong support is placed around 48,000-47,900.
Trade name: William O’Neil India Pvt. Ltd.
Sebi Registered Research Analyst Registration No.: INH000015543
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
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