Nifty recovered after the post budget volatility
Last Updated: 20th February 2023 - 05:30 pm
At last, Nifty rallied from the low of around 17700 and gave a breakout above its key hurdle of 17850-18000. However, it retraced some of the gains in the last three sessions and has ended above 17800.
Post the Budget week volatility, Nifty recovered gradually and was witnessing resistance around the falling trendline resistance at 17950-18000. This also coincided with the Budget-day high and the same was broken ahead of the weekly expiry day. The up move was majorly on the back of short covering by the FIIs as they trimmed some of their short positions and their ‘Long Short Ratio’ increased from 17 percent to 25 percent. The correction in the last couple of trading sessions seems to be a pullback move which we usually see post a breakout. The momentum readings on the Nifty daily charts are still in ‘Buy Mode’ and until this structure negates, one should look for buying opportunities in this dip. However, the Banking index relatively underperformed the benchmark in this period and it has not yet confirmed a breakout. The immediate support for Nifty is placed in the range of 17800-17700. If the index manages to hold this and resumes the upward momentum, then we could see a rally towards 18200-18250 in the near term. On the other hand, if the index weakens and breaks the 17700 mark, then this breakout has to be considered a false breakout which would be a bearish sign. Traders should keep a close tab on these levels and position their trades accordingly.
Amongst the sectoral indices, the BankNifty did not provide a confirmation of a breakout yet and is showing weakness. Certain stocks from the Oil & gas and IT sector witnessed good price volume action and such stocks could see positive momentum in the near term.
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