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Below the Quote on Weekly Market Analysis by Ajit Mishra, SVP - Technical Research, Religare Broking Ltd

Markets traded volatile amid mixed cues and gained nearly half a percent. The beginning was subdued and pressure on select heavyweights pushed the index lower in the middle. However, buoyancy on the global front triggered a rebound in the final sessions, which aided the index to close in the green. Consequently, both benchmark indices, Nifty and Sensex, closed a tad higher at 22,096.70 and 72,831.94 levels.Meanwhile, a mixed trend on the sectoral front kept the participants occupied wherein realty, auto and metal posted strong gains while IT and FMCG settled in the red. The broader indices also witnessed respite and gained ~1.5% each.

The coming week is a holiday-shortened one and we expect volatility to remain high due to the scheduled expiry of March month derivatives contracts. Besides, participants will continue to take cues from the global indices, especially the US markets, which are moving from strength to strength with every passing week.    The major index, the Dow Jones Industrial Average (DJIA) is set to test a new milestone of “40,000” and the support base has shifted to 39,200 in case of any profit taking.

The recent rebound in the Nifty can be largely attributed to the favorable global cues however it is still facing a hurdle around the short term moving average i.e. 20 DEMA. We reiterate our cautious view on Nifty until it decisively reclaimsthe 22,200 zone otherwise profit taking may resume. On the downside, 21,500-21,800 would continue to offer a cushion. Since we are seeing mixed trends across sectors, participants should focus on stock selection and risk management. We reiterate our preference for index majors & large midcaps and suggest utilizing rebound in the smallcap space to reduce positions.

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