On the higher side, 11,090 would be a hurdle and in case market crosses 11,090 on March 11 then we can expect one more round of trending move towards 11,140-11,150
Shrikant Chouhan
Nifty on March 8 ended at 11,089 and a close below 11,050 suggests that Nifty is on the verge of retracing to 10,900-10,880. However, while looking at the options data, 11,000 and 10,950 would play important roles while falling towards 10,900.
Based on the short-term outlook of the market at 10,950-10,955, we should be ready to cover our short selling positions and to accumulate select stocks between 10,950 and 10,900.
On the higher side, 11,090 would be a hurdle and in case market crosses 11,090 on March 11 then we can expect one more round of trending move towards 11,140-11,150.
The broader outlook of the market is turning positive as the market breadth has improved dramatically in the last 10 days and that would shift base higher.
The earlier base was at 10,550 and now it would shift to 10,850. On the higher side, it would extend to 11,350-11,400 from 11,150-11,200.
Sector Specific:
Banks and NBFCs did well that shows renewed interest and buying confidence in the market. Buying is also witnessed in PSU stocks, it means the market is optimistic about the ruling party to come to power in the coming elections.
Beaten down sectors like power and energy also did well, which is an indication of value buying has started in select stocks.
Likely chances of a cut in interest rates in the coming policy and fall in bond yield must be the trigger for buying momentum in banks, power, and energy stocks.
Technology sector remained under profit-taking pressure mainly on the back of unusual strength in INR, however, it is a product of strong chances of a cut in interest rates and fall in bond yield.
For the time being it is better to stay away from large-cap technology stocks. However, for the pharmaceutical sector, long term scenario is improving.
Since October 2018, broad-based buying is happening in the sector at each major decline and in the previous month, buyers turned more aggressive. Buying is advisable in pharmaceuticals with a long term view in the mind.
Positional traders and medium-term investors should be active to trade metals, auto and FMCG sectors.
On March 11, the strategy should be to short sell if Nifty breaks 10990. For that stop loss must be kept at 11050. On the downside, we can expect 10,960 and 10,930.
The author is a senior VP (Technical Research), Kotak Securities.
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