Momentum Picks - March 21, 2022 - ICICI Direct

Market Outlook

Equity benchmarks extended gains over a second consecutive week as a cool-off in commodity prices and VIX boosted market sentiments that provided impetus to the global recovery. The Nifty ended the truncated week at 17287, up 4%. In the process, Nifty midcap and small cap indices relatively underperformed by gaining 2.5% and 1%, respectively. Sectorally, financials, auto, IT and realty remained at the forefront during the week.

Technical Outlook

- On expected lines, the index resolved higher and approached our earmarked target of 17300. The weekly price action formed a strong bull candle carrying a higher high-low, indicating continuance of positive bias. Key point to highlight is that the index has closed above its previous week's high after eight week's corrective phase, indicating a pause in downward momentum. As a result, the index retraced 61.8% of January-March decline (18350-15671), placed at 17300, in line with past two occasions, since October 2021

- The formation of higher peak and trough along with multi sector participation signifies positive bias. Further, cool off in VIX, crude oil prices and easing of geopolitical concerns have provided impetus to gradually extend the ongoing rally towards 17900-18000 mark in coming months as it is 80% retracement of entire corrective phase since October 2021 (18604-15671). The Nifty has witnessed a sharp rally of 1670 points over past two weeks. Thus, healthy retracement of past two week's rally cannot be ruled out. However, such a temporary breather should not be construed as negative. Instead dips should be capitalised on as incremental buying opportunity to ride the next leg of up move

Today's calls

Intraday - Tata Steel, Kotak Mahindra Bank
Positional - Prestige

For details, click on the link below:

Link to the report

Source : Equity Bulls

Keywords

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