Nifty eyes bullish momentum with inverse head & shoulders; How to Trade on Friday?

Indian benchmark indices ended marginally positive on Wednesday, extending their four-day winning streak, driven by strong buying trends in banks and financial stocks. The S&P BSE Sensex closed at 80,956.33, up by 110 points (0.14%), while the Nifty50 closed at 24,467.45, rising by 10 points (0.04%).

On Thursday, Indian indices continued their positive trend, supported by strong performances in IT and bank stocks. The S&P BSE Sensex settled at 81,765.86, up by 809.53 points (1%), and the Nifty50 rose to 24,708.40, gaining 240.95 points (0.98%).

Key Market Drivers

Dr. Praveen Dwarakanath, Vice President at Hedged.in, noted that the Nifty took support from its 50 EMA at the 24,300 level early in the day, signaling continued bullishness. The index broke its resistance at 24,500 and surged toward the next resistance level at 24,850, with further resistance expected at 25,300. Momentum indicators show that bullish momentum is likely to persist.

Sector Performance

IT and financial stocks led the market rally, with notable contributions from Infosys, ICICI Bank, and Tata Consultancy Services (TCS). The broader market showed strength, with sectors like oil & gas also performing well.

How to Trade on Friday?

Traders can consider the following technical insights for Friday's trading:

Immediate Resistance: The Nifty faces immediate resistance at the 24,850 level, with a further resistance at 25,300.

Support Levels: Key support for Nifty is at the 24,300 level, where it found support earlier this week.

Trading Strategy: Given the bullish momentum, traders can look for opportunities to buy near support levels and target the resistance zones around 24,850 and 25,300.

Investors should stay cautious around these levels, as breakouts above resistance could indicate further upward movement, while reversals might signal profit-taking opportunities.

Other Market Developments

US Markets: Wall Street's main indexes opened with muted gains, awaiting key employment data later this week.

OPEC+ Decision: OPEC+ extended oil supply cuts through March, which could impact global crude prices.

Gold and Silver: Gold prices surged by Rs 300, reclaiming the Rs 79,000 level, while silver continued to shine, rising by Rs 1,300.

Outlook for the Week

Investors are advised to keep an eye on macroeconomic data, including employment reports and policy decisions that could influence market trends. The Nifty's upward momentum, combined with strong sector performance, suggests a bullish outlook, but caution is advised as the market approaches key resistance levels.

The market remains bullish with momentum favoring the bulls, but traders should be prepared for potential pullbacks around key resistance zones.