With 9,400 conquered, Nifty now sets sight on 9,970

Mumbai: The markets rallied for the third straight day as beaten down financial stocks extended gains. Global cues once again remain supportive, so also hopes of a fiscal package and easing of lockdown restrictions aided the positive sentiment.

The BSE benchmark index, the Sensex, scaled a high of 32,898, and settled with a gain of 1.9 per cent at 32,720. Lending major HDFC zoomed over 7 per cent to Rs. 1,837, while HDFC Bank was the other major gainer, up nearly 5 per cent at Rs. 977.

HCL Technologies, Mahindra & Mahindra, Tata Steel, SBI, ICICI Bank, Bajaj Finance, Infosys, TCS, Larsen & Toubro, Bharti Airtel and ONGC were the other prominent gainers among the Sensex 30, up 2-4 per cent each. On the flip side, Axis Bank dropped over 3.5 per cent to Rs. 439 on the back of earnings dis-appointment. Asian Paints and Hindustan Unilever were the other major losers, down 3 per cent and 2.5 per cent, respectively.

Today’s rally was broad-based as all sectoral indices ended on a positive note, with most of them with a gain in excess of a per cent each. The BSE Metal index up nearly 4 per cent, followed by the BSE Finance, IT, Bankex, Auto and Capital Goods indices up 2-3 per cent each.

The market breadth too was fairly positive compared to the last two trading sessions. There were as many 1,400 advancing shares for 950-odd declining stocks on the BSE. Today, 27 stocks recorded a fresh 52-week high, while 90 stocks touched a new 52-week low.

Going into trade on Thursday, as per the daily Fibonacci charts, in case of further up move the BSE Sensex may face resistance around 33,000-33,085-33,170, while in case of a downside the index may seek support around 32,440-32,355-32,270.

After struggling around the 9,390-level for the last three trading sessions, the NSE Nifty today finally conquered the hurdle with a strong 1.8 per cent rally at 9,553. Thus, the index has now opened the doors for intermediate target of 9,970 and 10,550, which are the 50 per cent and 61.8 per cent, respective retracement level for the recent fall.

However, in the interim the NSE Nifty may face some resistance around the higher end of the Bollinger Band around 9,740-odd levels and the 50-DMA (Daily Moving Average) at 9,880. The short-term bias for the index is likely to remain positive as long as the Nifty sustains above the 20-DMA at 8,940-odd levels.

Among key momentum oscillators, the MACD (Moving Average Convergence Divergence), Slow Stochastic and the Directional Index are in favour of the bulls, hence further upside seems likely. The 14-day RSI (Relative Strength Index) is in neutral mode.

Disclaimer: The article is for information purpose only and does not advocate any buy or sell recommendation.