Nifty Outlook 8 March 2023

Ahead of the mid-week holiday, Nifty started Monday’s session on a positive note and witnessed a rally upto 17800 in the first half of the trade. However, the index gave up some of the gains in the later part and ended the day tad above 17700 with gains of over 100 points.

Nifty Today:

The indices have seen a sharp pullback move in last couple of trading sessions and have retraced some of the recent losses. The major concern seen in the recent corrective phase was the FII’s short positions in the index futures segment where they had around 85 percent of positions on the short side during last week. However, they covered some of their short positions on Friday and their ‘Long Short Ratio’ improved to around 23 percent. This indicates that the stronger hand have started covering their short positions and other data such as upmove in global markets and appreciation in INR indicated positive biases for the equities.

The momentum readings on both Nifty as well as BankNifty are on the buy side and hence, any declines are likely to witness buying interest. The immediate support for Nifty is placed in the range of 17600-17550 and traders should look for buying opportunities on declines towards the support range. On the flipside, the 38.2 percent retracement of the recent correction from all-time high of 18888 to 17255 is around 17880 which would be the immediate level to expect. However, if the trend continues based on global cues, then in the near term the index could see an upmove towards the 50 percent retracement mark which is placed around 18070. 

 Short covering by FII’s led to pullback in indices, PSU index hits all-time high

In last couple of trading sessions, we have seen broader market participation which is a positive sign. The Banking space is continuing to lead from the recent lows while the Nifty PSE index rallied to mark a new record indicating buying interest in the PSU names too.

Nifty & Bank Nifty Levels:

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