Hello reader, hope you’re doing well. As it currently stands, backed by a rally in Wall Street and it’s Asian peers, Nifty is set to give a positive opening, with SGX nifty trading about 0.4% higher. Another important factor which would play a key role today would be the MPC meet outcome, which would be the first one for the calendar year 2023. Expected result is a 25bps rate hike, but the important thing to see is whether we’ll have a pause in rate hikes or will it continue to be hiked gradually to tame inflation.
Moving on to the main indices, Nifty is currently consolidating in a pretty narrow range, which is between 17500-17900, and post budget we’ve been seeing multiple inside bars being formed on the chart, which qualifies for a narrow range breakout strategy. The upper and lower bounds of the budget candle are 17972 and 17353, respectively. For more momentum on the upside, Nifty will have to sustain above 17972 but until then, it will test the patience of many.
We have a very similar pattern being formed in Banknifty as well, with the last four trading sessions being inside the budget day candle range itself. Although, structurally, this index looks a bit stronger as it has given a good bounce from its 200 EMA levels and RSI is slowly inching upwards, with today’s MPC outcome which can be a key trigger.
Good thing to note here is that many stocks have formed good short term bottoms, and a good bounce can be expected from current levels. As always, keep in mind that risk management is key, and is top priority. Have a good trading day, and may the force be with you!
Disclaimer: this post is for educational purposes only, we are not SEBI registered analysts. Trades mentioned here are not trade recommendations. Equity Investments are subject to 100% market risk, please consult your financial advisor before investing.