Bulls in total control; Indian markets approach near days high; US 10-year bond yields eased

Update: Nifty has witnessed recovery from its afternoon lows and currently, it is trading near the day’s high, up by 120 points at 14,863, aided by a drop in the US 10-year bond yields.  

HDFC Bank and Reliance Industries emerged as the top two contributors to the index gains as collectively, they have contributed about 50 points.   

Meanwhile, Nifty reclaimed its important moving average of 50-DMA, which had slipped as of March 18.  

Amongst the sectoral indices, Nifty PSU Bank, Bank Nifty, and Nifty Private Bank were the top gainers.   

Cues from the global markets: European stock markets were trading lower as concerns over the third wave of COVID-19 infections in the region upset sentiments of the market participants. Dow Jones Futures went down by a quarter of a per cent; however, it was seen bouncing back from the lower levels.   

Update: Nifty zooms above the 14,800 mark, aided by a strong move in the banking stocks. HDFC Bank, ICICI Bank, SBI, and Axis Bank were the top contributors to the index as they have collectively contributed 58 points to the index gains. Nifty PSU Bank has rallied more than 3.5 per cent and interestingly, all the stocks of Nifty PSU Bank were in the green.  

Regarding the loan moratorium case, Supreme Court stated that the waiver of complete interest is not possible as it affects depositors.

It was a roller-coaster ride for Nifty on Monday as it started off the session on a negative note and as the day progressed, it further extended its weakness. On the way down, Nifty made a low of 14,597.85 but thereafter, a sharp rebound was witnessed in the second half of the trading session, which resulted in trimming of bulk losses as Nifty recovered about 150 points from the day’s low and ended with a modest loss of 7 points.   

As the price stayed within the high and low of the prior bar, we have witnessed a formation of the inside bar. Along with this inside bar (ID) formation, Nifty has formed a Doji candle as the close of the day was near the opening level and also formed NR4 as the daily range was narrowest in the last four trading sessions. In short, we have a formation of Doji+ID/NR4. Generally, after the formation of this pattern, we witness a sharp move in the subsequent days. Hence, watch out for the high and low of Monday's bar i.e., 14,764 and 14,598. A break on either side range would result in a sharp and trending move.   

As we had mentioned in our last write-up that 50-DMA would be crucial to watch out for in the near term. Nifty had breached its 50-DMA on March 18 and in the subsequent two trading sessions, it has tested the 50-DMA, but could not manage to close above the 50-DMA. So, in the near term, a close above the 50-DMA would give a booster to the bulls whereas, in the short-term timeframe, Nifty has managed to pullback itself above the 20-DMA, which is positive. Further, Nifty PCR across all expiries stands at 1.14, which is fairly placed and also, provided room for the continuation of the pullback.    

A move above the 14,764 levels could open gates for further upmove towards the level of 14,850 and 14,900, while on the downside, a breach of 14,598 level would result in the extension of downfall towards the level of 14,400-14,350.