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Vipin KhareDirector- Research, William O’Neil India
Where we are: During the week, the Nifty50 breached its 50-DMA, but was able to retake it on Thursday.
On the budget day, it retook its 200-DMA and closed above it, while the Nifty500 closed marginally above its 50-DMA.
Midcap and smallcap indices are trading below their key support levels.
On the sectoral front, Nifty Bank, IT, and FMCG are trading constructively, while metal and media are dragging the market.
What is in the store: For the Nifty, 10,985 level is acting as strong resistance.
A follow-through above that level can be a positive sign for the market.
It is important for the Nifty to trade above its 50- and 200-DMA because even after triggers like the budget and Q3 results, if the Nifty fails to hold its key support, the short-term outlook becomes negative.
What can investors do: Investors should look for the Nifty to trade above 10,985 level and go for pyramiding approach to take any fresh positions as the markets are in limbo and facing selling pressure after accumulating some gains.
Investors should shortlist stocks based on sectors that are performing well and avoid taking fresh positions in a stock just before its results.
The FMCG, consumption, and IT sectors look good.
Investors should limit their investments to technically strong stocks trading above their 50- and 200-DMA.
