Nifty Outlook 2 Mar 2023

The markets finally witnessed a respite from last few days of sell-off and it saw a pullback with a buying interest in the broader markets. Nifty moved higher gradually throughout the day and ended around 17450 with gains of about nine-tenths of a percent.

Nifty Today:

After the recent sell-off, the Nifty index breached its Budget-day low at the start of the week, but the BankNifty did not and it gave signs of a positive divergence. The divergence finally played out as we witnessed a recovery in the banking index as well as in Nifty. Now is this just a pullback move or a reversal of the short term downtrend? In our sense, odds are in favor of a trend reversal as the positive divergence after a correction is generally seen at bottoms. Further, the Nifty Midcap 100 and the SmallCap index has managed to recover well from their important supports thus forming a base at this week’s low. The FII’s positions are also short heavy with ‘Long Short Ratio’ at just 15 percent and no. of short positions at highs which were seen around the bottom of June 2022. Thus, if they cover their shorts from here, then it would lead to a decent upmove from current levels. Hence, it would be crucial to see their positioning in the next few sessions. Looking at above technical evidences and the data, we advise traders to look for buying opportunities and trade with a positive bias. The Midcap stocks could deliver good returns in the short term and hence, one should focus on buying quality prepositions there. 

Market recovers post recent sell-off, Midcaps witness buying interest

In options segment, the call writers at 17400 strike ran to cover their positions and put writing was seen in the later part of the day which is a positive sign too. The immediate support for Nifty is placed in the range of 17350-17300 while 17550-17600 will be the immediate levels to watch on the higher side.

Nifty & Bank Nifty Levels:

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