Nifty formed a bullish candle on the daily chart and has been forming higher highs-higher lows from the last four sessions.
Nifty opened in the green at 14710 and extended gains as the day progressed to hit an intraday high of 14890. Nifty rallied 211 points, to close at 14864, the highest closing since 8th April 2021.
Nifty continued its winning streak for the third consecutive session and closed near its three-week high ahead of the Federal Reserve meeting's outcome and expiry of the April derivative contracts.
It is an eventful day, with Fed policy and Biden's session of Congress. Ahead of both these events, dollar index is showing tentative signs of recovering, however, FII inflows into local stocks are weighing on USDINR spot.
Superior Q4 results and vaccine optimism buoyed domestic markets to trade on a positive footing for the third consecutive day ahead of the Fed interest rate decision. Strong buying interest was seen in banking and auto stocks with enhanced business prospects which is likely to be maintained.
Markets extended gains for the third consecutive session, in continuation to prevailing buoyancy around the earnings season. Despite caution amongst global peers ahead of the FOMC meet, the benchmark opened gap-up and continues to surge higher. Earnings outcome of companies in the banking and auto space (thanks to Axis Bank and TVS motors) led the up move as it further boosted investor’s confidence. Consequently, Nifty ended higher by 1.4% at 14865 level. Broader markets too ended in positive in the range of 0.7-0.8%. Barring healthcare, metals and capital goods, all sectoral indices ended in the green.
Bulls appear to be in the commanding position as they witnessed a steady rise in the last couple of trading sessions, which led the Nifty rally to close above its 50day simple moving average whose value is placed around 14800 level. Technically speaking this should instill more confidence among bulls as the underlying trend can be strengthening in their favour.
However, a confirmation will come once the bulls push the index beyond the interim top of 14984 and in that scenario, bigger targets of 15350 can't be ruled out.
Nifty needs to sustain above the bullish gap 14695/14667 registered on 28th April 2021 in and a close below the said gap zone can be considered as an initial sign of weakness.
Traders should remain neutral as markets may remain choppy on 29th April 2021, the monthly expiry day.
Except metal and pharma, all other sectoral indices ended in the green. Midcap and Smallcap indices rose 0.7-1 percent.