Podcast | Stock Pick of the Day: 'Trade with positive bias, Nifty support at 10,994–10,840'

A move towards this important junction cannot be ruled out in days to come. Traders are advised to trade with a positive bias and expect 10994 – 10840 to act as a strong support zone for now.

After an extended weekend, our markets opened flat despite SGX Nifty suggesting a gap down opening on March 5. During the initial trade, Nifty dipped a bit, but after that, we witnessed an upward momentum during the week.

Though the last couple of days did not see much price action, we need to appreciate the fact that despite all Asian bourses falling on the last day, the Nifty managed to close above 11,000.

For the last few days, the index was consolidating and mid and smallcaps started attracting traders’ attention. However, the first trading day of the week turned out to be the trend deciding day for our benchmark indices.

Due to the positivity, Nifty has confirmed a breakout from the falling trend line on the daily chart. Thus, muted action in the last two days should be construed as a pullback or a breather.

Further, if we observe the daily chart meticulously, we can see the formation of ‘Megaphone’ pattern. With supports of 10,583 and 10,585 being the base of the same, the higher trend line is extended towards 11,300–11,350.

Hence, a move towards this important junction cannot be ruled out in days to come. Traders are advised to trade with a positive bias and expect 10,994–10,840 to act as a strong support zone for now.

As far as individual sectors are concerned, barring IT and FMCG, all other sectors contributed in this rally and look poised for extended moves; thereby providing credence to the up move.

If we have to highlight a few sectors then it’s no brainer, banking certainly looks encouraging. Within this, Midcap private banking remains to be our preferred space along with selective PSU banking counters.

Also, the Midcap index, which has been oscillating within the boundaries of a ‘Triangle’ pattern since September, has finally confirmed its breakout and is set to continue the upward trajectory.

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