Positive market breadth leading to recovery from support: Expert

ST CORRESPONDENT
Friday, 17 April 2020

Ruchit Jain, Equity Technical Analyst, Angel Broking, said that post Wednesday’s correction in the index from its highs, Nifty started trading marginally lower in today’s session. The index managed to find support around 8800 and pulled back higher to end the day with gains of a per cent.

PUNE: The Nifty index on Thursday broke its two-day losing streak and ended up 67.50 points higher at 8992.80. At the start of the year, Nifty opened at 12202.15 but started witnessing a significant downward trend from March. Similarly, the BSE Sensex on Thursday was up 222.80 points at 30602.61 compared to Wednesday.

Reacting to the trend, Ruchit Jain, Equity Technical Analyst, Angel Broking, said that post Wednesday’s correction in the index from its highs, Nifty started trading marginally lower in today’s session. The index managed to find support around 8800 and pulled back higher to end the day with gains of a per cent.

He further said that the index consolidated in a range in Thursday’s session post some recovery from the support of 8800. “The overall market breadth was in favour of advances as, except IT, stocks from most of the other sectors witnessed some positive momentum. The index now seems to be undergoing a consolidation phase amidst a stock-specific action in the broader market. For the near term, 8800 is the crucial support to watch, whereas 9260-9320 is the immediate resistance zone. 

During such consolidation, traders should adopt a strategy to look for potential outperforming counters and take a stock-specific approach. A move beyond the above-mentioned range of 8800 - 9320 could then lead to some directional move. The Banking index had under-performed in this pullback move so far which has immediate resistance around 20325. A breakout above the same is required for some quick recovery to catch up for the recent underperformance.” added Jain.

The COVID-19 pandemic has impacted different sections of the economy. So the government has also decided to lift some curbs and revised guidelines for the extended coronavirus lockdown. The recent guidelines issued by the MHA will come into effect from April 20, 2020. It states that there are select additional activities that would be allowed to function, which can help recover from the damage caused by the pandemic.

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