Stock market recap: The benchmark equity indices—Sensex and Nifty 50—ended in the green for the second consecutive session on Thursday, due to buying at the fag end of the session despite weak global cues and a sharp jump in crude oil prices.
The Sensex closed 185 points, or 0.25%, higher at 73,319.55. The 30-share pack vaulted 1774 points from the day's low of 71,545.81 to end in the green. The NSE counterpart, the Nifty 50, rebounded 531 points from its day's low of 22,182.55 to end at 22,713.10, up 34 points, or 0.15%.
Friday was a market holiday for Good Friday.
ADANIPOWER: Buy above 160, stop 151, target 175 (Multiday)
ANANDRATHI: Buy above ₹3,210, stop ₹3,070, target ₹3,450 (Multiday)
MPHASIS: Buy above ₹2,210, stop ₹2,110, target ₹2,410 (Multiday)
In total, the Sensex surged nearly 1,750 points from its low, while the Nifty climbed back above 22,500. The market breadth was positive, with 2,548 stocks advancing against 1,505 declines. Despite the recovery, benchmarks remain under pressure, having lost about 0.6% this week, marking six consecutive weeks of decline. The rebound highlights investor resilience, though sentiment remains cautious amid geopolitical concerns and global market volatility.
Hesitation continues to be one of the dominant emotions curbing indices' rise. As the trends attempt to take hold over the next few days, the long body candle revival has once again assured that the trends are beginning to take shape, as steady buying participation was witnessed throughout the day! The rupee has begun to cool off after surging on Thursday, when the central bank tightened the screws on speculative bets against the currency, delivering its best single-day gain in 13 years. In 2013, policymakers had resorted to extraordinary measures to stabilise it.
Trading that had been daunting in the last few sessions is now back to alternating trends. The fall seen on Thursday and the swift recovery before the long weekend continue to offer multiple gaps where the Fibonacci levels could play a part. With the bias and newsflow muted, the possibility of a revival remains distant. In such a situation, we need to remain calm and hold out for any potential recovery. It would have been a wonder if one came out largely unscathed in the week.
With no clear trigger beyond geopolitical newsflow, we should continue to expect a sedate move, as the strong support at 22,200 mentioned in the recent article and the rebound seen could extend after last week's decline. The supplies at higher levels will continue to test traders' confidence, but the recovery emerging swiftly from lower levels signals that the highs will continue to attract demand. With strong bullish possibilities emerging, we can now see that the weekly charts are showing aggressive upside potential. As positive cues continue to emerge, one should consider participating at every dip, as the market retains a positive bias.
With the results season generating some heat and rampant geopolitical newsflow driving up the volatility, we need to see how to navigate the current trends. While the market continues to offer umpteen opportunities, sector rotation will be at work; hence, we have selected candidates that are showing steady action on both sides until new signals to the contrary emerge.
For shorts to be taken on, we need to see Nifty move above 22,200, which is the immediate support as per the Open Interest data. The breach mentioned earlier did happen, indicating that the trends remain delicately poised.
The best approach is to continue looking at a 30-minute range breakout on Monday, as we can consider trading on either side, given that the trends remain tentative and we expect some resistance to kick in.
While the trends in the indices remain unclear, there is plenty of action in the stocks. We should now refrain from entering short positions in the Nifty and wait for confirmation that it will move above 23,000. Any sustained move below 22,200 would be a clear sign that bullish conviction is waning. With Max Pain at 22,800, the resistance has moved from 23,200 to 22,800, while open interest suggests the road ahead is more open to an upside.
ADANIPOWER (CMP ₹159.97)
ADANIPOWER: Buy above 160, stop 151, target 175 (Multiday)
ANANDRATHI: Buy above ₹3,210, stop ₹3,070 target ₹3450 (Multiday)
MPHASIS: Buy above ₹2,210, stop ₹2,110 target ₹2,410 (Multiday)
Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.
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