Bulls win key battles again with massive run-up; eyes set on 15,550 mark

Just like you cannot keep Ravichandran Ashwin out of the test match (cricket), similarly, no one can keep the bulls away from the D-Street for too long.  

Last week, we saw the bulls taking rest but this time, right from day one, they had made their intentions crystal clear by gaining 151 points or 1 per cent and closing at record highs on Monday.   

Bank Nifty was the real superstar of the day as it had gained more than 3.5 per cent and notched a record closing high. All Bank Nifty components closed in the positive territory. Moreover, the top 4 gainers in Nifty 50 index were from the banking sector. Further, bulk gains of Nifty 50 were contributed by these four top gainers as their contribution was nearly 127 points.   

The FIIs were net buyers to the tune of Rs 1,300.65 crore on Monday and the FII flows till date in February so far exceeded January flows.   

Nifty formed a bullish candle with a gap-up opening. Technically, this pattern could indicate an upside breakout of the upper range of the last week’s consolidation. Further, this pattern has negated a bearish implication of the Doji candle, which was formed on Friday.   

Last week’s consolidation pattern was confined to 280 points and with the breakout of the range consolidation, we could expect the index to achieve the measured target of the last consolidation range. So, the breakout of the consolidation range was at 15,257 and if we add 280 points to this, the approximate target will come to around 15,537 levels.   

Nifty now has witnessed a vertical upmove of around 12 per cent from the Union Budget day’s low, but during this upmove, the index has failed to show any meaningful correction. So, the minor swing low, which was formed on February 10 at 14,977 levels could be considered as a higher bottom. Hence, as long as the index holds above this level in the near term, we may expect the bulls to be in a dominant position. 

Generally, a breakout of the consolidation range results into a sharper move on the upside and the target is usually achieved in one-third or half of the time of the consolidation range. Hence, we expect the momentum to continue on the upside as Nifty is likely to test the level of 15,530-15,550 in the near-term.