More than 250 smallcaps post double digit return as index post biggest gain since June 2020

Market This Week

The broader indices outshine the main indices and post biggest weekly gain in nearly 5 years in the week ended March 21 amid positive cues including rupee appreciation, foreign investors turning buyers along with falling dollar and crude oil prices.

During the week, the BSE Large-cap index added 4.6 percent, while BSE Mid-cap index rising 7 percent, posted biggest weekly gain Since February 2021 and BSE Small-cap index gaining nearly 8 percent, recording biggest gain since June 2020.

For the week, the BSE Sensex index rose 3,076.6 points or 4.16 percent to end at 76,905.51, and Nifty50 added 953.2 points or 4.25 percent to finish at 23,350.40.

All the sectoral indices ended higher with Nifty Realty and Media added nearly 8 percent each, Nifty Pharma and PSU Bank indices up 6 percent each, Nifty Auto index rose 5.8 percent.

"In the last week, the benchmark indices witnessed a stellar rally, with the Nifty gained 4.25 percent, while the Sensex was up by 3070 points. Among sectors, all the major sectoral indices traded in positive territory, with the Capital Market and Defense indices gaining the most. During the week, the market surpassed the 20 and 50-day Simple Moving Averages (SMA), which is largely positive," said Amol Athawale, VP – Technical Research at Kotak Securities.

"Technically, on weekly charts, a long bullish candle has formed, and on daily and intraday charts, it is holding a higher bottom formation, which supports further upward movement from the current levels. We are of the view that the short-term market texture is bullish; however, due to temporary overbought conditions, we could see some profit booking at higher levels. For traders, buying on dips and selling on rallies would be the ideal strategy."

"In the near future, 23,100/75800 and the 50-day SMA or 23,000/75400 would act as key support zones, while 23,500-23,700/77400-78000 could be the key resistance areas for the bulls. However, if it falls below 23,000/75400, the sentiment could change, and traders may prefer to exit from their long positions."

"For the Bank Nifty, it rallied over 5 percent last week and is currently trading comfortably above the 50,000 mark. For the trend, traders should consider 50,000 and 49,700 as key support zones, while the 200-day SMA at 51,000 and 51,300 could serve as crucial resistance areas for positional traders," he added.

Foreign Institutional Investors (FIIs) turned net buyers after 13 weeks, as they bought equities worth Rs 5,819.12 crore in this week, while Domestic Institutional Investors (DII) bought equities worth Rs 4,337.83 crore.

The BSE Small-cap index surged nearly 8 percent with SML Isuzu, IKIO Lighting, Uttam Sugar Mills, Balu Forge Industries, Sindhu Trade Links, KSolves India, Garden Reach Shipbuilders & Engineers, Valor Estate, Indraprastha Medical Corporation, Summit Securities, Marathon Nextgen Realty, Talbros Automotive Components, Indian Hume Pipe Company, Nuvama Wealth Management adding between 25-50 percent.

On the other hand, Rajoo Engineers, Veritas, Best Agrolife, Kamdhenu Ventures, Gensol Engineering, Mercury Ev-Tech, GVK Power & Infrastructure, Sadhana Nitrochem, Abans Holdings, Peninsula Land, Mahanagar Telephone Nigam, Pearl Global Industries, EKI Energy Services, KEI Industries fell between 5-10 percent.

The underlying trend of Nifty continues to be positive. Having surpassed the initial hurdle of down sloping trend line around 23200-23250 levels, the Nifty could now advance towards the next resistance of 23800 levels in the near term. Immediate support is placed at 23250 levels.

Technically, Nifty continued its strength after breaking the trend line resistance and formed a bullish candle on both the daily and weekly charts, indicating strong momentum. Immediate support for the index is placed near the 23,000 level, while short-term resistance is positioned near 23,520, where the 100-day Simple Moving Average (SMA) is located. As long as Nifty stays above 23,000, traders are advised to follow a "buy on dips" strategy.

The Nifty continues to move upward following a falling trendline breakout, supported by upbeat sentiment. During the last trading session, the index encountered resistance at the 21-week exponential moving average, which is placed at 23,382. A decisive move above 23,400 could drive the index higher by another 200 points, as the next resistance is at 23,600. A clear breakout above 23,600 might trigger another leg of the rally. On the other hand, failure to move above 23,400 could lead to near-term consolidation.

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