Analysts expect the Nifty, which hit a new high yet again, and the Sensex that jumped more than 500 points on February 22 to go even higher, saying that the sentiment has turned positive.
The rally was fuelled by late buying in IT, and automobile names. Despite a shaky start, the indices rebounded in late trade and the Nifty soared to a new high of 22,252.
According to Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd, the market's upward momentum was driven by robust global cues, leading the Nifty to make a U-turn from the day's low and close near all-time high levels, gaining 162 points (0.7 percent) at 22,217.
A broad-based rally along with the midcap sector, was evident.
Positive global sentiment was further boosted by strong Q4 results and a favourable outlook from chipmaker Nvidia.
“Furthermore, HSBC Flash India PMI data released today for the month of February pointed towards India’s economic activity – both manufacturing and services being at a 7-month high, helping Indian markets make a sharp recovery. We expect this ongoing momentum to continue with markets attaining new highs,” Khemka said on February 22.
Technical analysts say that movement suggests bulls are in control, advising participants to maintain a "buy-on-dips" approach unless the Nifty decisively slips below 21,800.
Rupak De, Senior Technical Analyst at LKP Securities, pointed to high volatility during the day due to the weekly expiry of Nifty options.
On the lower end, the index found support at the 21EMA before moving higher. The momentum indicator has experienced a bullish crossover. “Overall sentiment has turned positive once again, with the potential to reach towards 22,400/22,600 in the short term. On the lower end, support is placed at 22,100,” De said.
“Overcoming the morning jitters triggered by the minutes of the Fed meeting, Nifty achieved its highest-ever closing. With the market displaying a 'buy on dips' sentiment, Nifty's bounce back from its 20-day EMA, coupled with the formation of a bullish hammer candle, signals bullishness. We may witness a significant rally once 22,250 is breached. On the downside, 22,000 remains the major support,” said Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy.
Brokerage house Prabhudas Lilladher said that Nifty witnessed a strong pullback to erase early losses to climb to hit 22,252 . It expects the index to move to 22,400 and 22,800 in the coming days.
"Bank Nifty witnessed a decent revival from 46,400 zone but resisted near the 47,000 levels to end lower near 46,900 zone and has been underperforming as compared to the Nifty index. The index would have the important support of 50EMA level near 46,200 zone and would need a decisive breach above 47,400 levels to improve the bias. The support for the day is seen at 22,100, while the resistance is seen at 22,400.”
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