Nifty Outlook for 5 September 2023
Nifty started the day on a positive note and surpassed 19500 mark. The intraday dip got bought into and the index ended the day around 19550 with gains of about half a percent.
During last week itself, the Nifty had resumed the positive momentum on Friday and hinted at a bottom formation at the recent swing low of 19300-19250 range. The RSI smoothed oscillator gave a positive crossover and the index too gave a breakout from the falling trendline resistance of the recent corrective phase. This indicates a resumption of the uptrend in the Nifty and hence, we continue with our optimistic view on the indices. Amongst the index heavyweights, the IT stocks rallied higher and the Nifty IT gave a breakout above the crucial hurdle of 31650 which was acting as a hurdle since more than a year. Such breakouts shall now lead to a trended phase in the large cap IT names which had relatively underperformed the markets in last few months, and this should lead to positive move in the benchmark as well. In the options segment, significant put writing has been seen in 19500-19300 strikes and thus, intraday dip should be seen as buying opportunities. On the higher side, we expect the index to rally towards 19650 which would be the important hurdle now, and once this level is surpassed then we could gradually move towards new highs to mark new milestones again.
Nifty rallies and resumes uptrend; resistance breakout in IT
Traders are advised to continue to trade with a positive bias and look for buying opportunities. A lot of sectoral moves are seen these days which provides good stock specific opportunities for trading. One should capitalize on such moves which can provide decent short term returns.
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