After an indecisive trade on Tuesday, the markets shot up on Wednesday and staged an excellent rally that went beyond 5000 on intraday basis.The index opened in the positive tracking bullish cues among the Asian peers and went on to gain every hour as it outperformed its regional peers. The large bullish candle indicates strength that is likely to continue in the coming sessions as well. Volumes expanded yesterday and an extremely favorable A/D ratio of 3.6:1 suggests that the bears were cornered. Volatility subsided down to 24.90 suggesting a cool-off phase and a potential up move. Momentum has shifted on the upside as per the daily oscillators (rolled bullish) and thus expect the up move to continue. Nifty breached the 21-day EMA resistance at 4945 and is now on course to test its 200 SMA at 5065. The up move could get stretched to the upper boundary of the falling trend channel i.e. at 5095. The immediate downside is now protected by the 21-DEMA of 4945.
All the sectoral indices ended the day in the green and were led by strong moves in Auto (+3.86%), Cap Goods (+3.63%) and Power (+3.49%) indexes. Among the underperformers of the day were Healthcare (+1.05%) and IT (+1.48%). Broader markets were unable to keep pace with their frontline peers and closed the session with gains of 1.78% for the Mid-cap index and 1.48% for the Small-cap index.
Bullish Setups: LT, DLF, IDFC, CNXBANK, REC,
Bearish Setups: DRRD, LICHF, INFO, HDFC
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