On the day of the monthly and quarterly expiry, the market stopped at the crucial support of 14,250 and on March 26, the next day, the index formed the Bullish Harami candle, indicating that the coming week may be positive for the market.
The Bullish Harami candle is a reversal pattern appearing at the bottom of a downtrend. It consists of a bearish candle with a large body followed by a bullish candle with a small body enclosed within the body of the prior candle.
Traders will often look for the second candle in the pattern to be a Doji that appeared on the chart on March 26. It is also a sign of changing momentum.
On March 30, the Nifty must go past 14,580, as will lift the market to 14,750 or 14,900. On the other side, 14,250 would be major support and in case the market breaks 14,250, it can fall to 14,000 or 13,900 levels.
Based on the broader structure of the market, it would not break the level of 13,600 and any decline towards 13,600 would be an opportunity to buy select stocks with a medium-term view.
The Bank Nifty has also formed a Hammer formation on March 25 after hitting the level of 32,415, however, the next day the continuation was missing. We need to see that if the Bank Nifty crosses 33,700. Above 33,700, the BankNifty will move to 34,700-35,000.
Most stocks are near to the large support or have formed the reversal formation. Metals and FMCG stocks were the performers of the week and are likely to do well good in the coming week as well.
The performance of auto stocks was the worst and the reason was the rising COVID-19 cases. The vaccination programme will boost the vehicle sector in the long term but coronavirus news flow will be negative for the segement in the short term.
For the technology sector, the strategy should be to buy largecap companies on dips with a view of two weeks. In the anticipation of strong quarterly numbers, we could see a rally in the stocks.
During the week, FIIs sold shares to the tune of Rs 6,000 crore till March 25, while domestic institutions bought stocks over Rs 3,000 crore. During the week, the dollar index was the biggest factor that dragged the market down. It was at 91 and moved to 92.80 on March 26. It’s a cause of concern for emerging markets as it controls liquidity flow for the emerging market. In the coming week, again the trend of the market would largely depend on the trend of the dollar index.
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