Benchmark indices Sensex and the Nifty have turned bullish this week defying the bearish sentiment of last week. In just three trading days of this week, the Nifty has gained nearly 400 points while the Sensex is up by over 1,200 points.

The Nifty rose 211 points, or 1.44 per cent, at 14,864 on Wednesday. The Sensex gained 789 points, or 1.61 per cent, to close at 49,733. Last week, the two indices were trading nearly 8 per cent lower than their February peaks. The market will take further cues from election results of five States, which will be declared on May 2.

“Technically, the Nifty has formed a strong bullish candle. After a long time the index managed to close above the 50-day simple moving average, which is broadly positive for the market. However, intra-day charts suggest that market is overstretched and it may take a temporary pause near 14,925/50,100 levels. We are of the view that the larger texture of the market is positive and an ideal strategy should be to buy on dips rather than chasing Nifty at higher levels. In the near future, 14,750-14,700/49,100-49,400 levels should act as an important support for the Nifty/Sensex, trading above the same we can expect up trend continuation of wave up to 14,925-15,000/50,100-50,500,” said Shrikant Chouhan, Executive Vice-President, Kotak Securities.

Global stock markets will also react to US FOMC meet outcomes in early trade on Thursday and then the focus would shift to the monthly derivatives expiry and earnings.

Related Topics