Indian benchmark equity indices saw a rebound from two-month lows after a bout of short covering that took the indices higher from lower levels, HDFC Securities said. Nifty kept making higher highs and higher lows through the day. At close, the Nifty 50 index gained 1.4% or 194 points to end at 14,504.8. Reports of fall in incremental Covid cases and higher recoveries stabilised sentiments in the markets today. 

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Nifty respected the double bottom of 14264 made on April 12 (low made on April 13 was 14275) and bounced back smartly, the brokerage further said. Nifty may face resistance from 14652-14683 band, HDFC Securities estimated while putting support at 14449 and later 14264 remains a support. 

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HDFC Securities also highlighted that Volumes on the NSE were lower than the previous day but in line with the recent average. Losers of the previous day including PSU Banks, Auto, Metals, Banks, Realty and Media gained the most while IT and Pharma were the top losers. The Nifty Midcap today index rose 1.7% while the small cap index ended 1.3% higher. The India Volatility Index fell 11% to end at 20.46.

HDFC Securities said that updated forecasts released by private weather forecaster Skymet on Tuesday suggest that the Southwest monsoon may be 103% of long-period average. Skymet is predicting normal rains for the eastern and central parts of India. "Should India see strong rains this year, it would be the third consecutive normal monsoon for the country, which remains dependent on seasonal rains for agricultural output," it said.

HDFC Securities highlights that sustainable buying has emerged in the afternoon and Nifty moved up sharply towards the end and closed near the highs. Previously, the market witnessed sustainable upside bounces from near this support towards the highs of 14900 levels. Hence, there is a possibility of history repeating again. Technically, the false downside breakout of the lower range at 14300 could mean chances of underlying testing the upper range of around 14900 levels in the near term. Follow-through upward move from here is expected to confirm this pattern.
 
Conclusion: The absence of follow through weakness on Tuesday and a strong comeback of bulls from the crucial lower supports/range could mean more upside in the short term. The formation of present pattern and the confirmation in the next sessions could eventually indicate a chance of revisit of the upper range of around 14800-14900 levels in the coming weeks. Immediate support is placed at 14420.