Nifty Outlook 28 Feb 2023

Nifty continued its corrective phase at the start of the week and breached the Budget Day’s low during the day. However, while the broader markets witnessed sell-off, the Banking index witnessed strength today and it gradually moved higher throughout the day. Nifty too recovered from the lows towards the end to close around 17400 while BankNifty ended with gains of a percent.

Nifty Today:

It was an interesting session as the broader markets witnessed a sell-off owing to the uncertainty seen in the global equity markets, but in contrast the banking space witnessed strength which provided support to the markets. Nifty breached its Budget day low while the banking index held on and witnessed an up move during the day. Now if we look at the daily chart, both Nifty as well as BankNifty index have already witnessed sell-off in the last 6-7 trading sessions without any pullback move and hence, the momentum readings on the lower time frame charts entered the oversold zone. The Banking index witnessed a pullback today to relieve the oversold setups and on the daily chart, and it has managed to defend last Thursday’s low of 39600 where we witnessed formation of a ‘Doji’ candlestick pattern. Nifty has formed a ‘Hammer’ pattern around the previous low support which is a reversal pattern. Considering the reversal pattern and the oversold set-ups, we could see a pullback move in the short term in the indices. However, considering the weakness in the broader markets and some sectoral indices, we are likely to see some sector rotation where some of the sector would continue to underperform while certain heavyweights could see an upmove to pull indices out of oversold zone. Hence, traders are advised to look for stock specific opportunities for the short term.

Nifty corrects for seventh straight session, banking showed relative strength

The immediate support for Nifty is placed in the range of 17300-17250 while resistances are seen around 17490 and 17570.

Nifty & Bank Nifty Levels:

​