Gold prices started Thursday’s trade on a strong note opening higher with a gap and fell gradually during most of the session till a fresh eight-month low of Rs 46011. Prices have been falling gradually in the last two weeks as recent strength in US treasury yields dented the non-yielding metal's appeal. Hence, ICICI Securities expect gold prices to remain weak towards Rs 45200 level in the short-term.
 
The daily price action formed a bear candle carrying a lower high-low, indicating extended profit booking over a third consecutive session. Going ahead, ICICI Securities expect the index to extend the ongoing healthy retracement towards 14900 in coming sessions amid stock specific action, wherein midcap and small caps would continue to relatively outperform.

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ICICI Securities believes the ongoing breather after a sharp post Budget rally of 13% would help the index cool off the extreme overbought conditions of weekly stochastic oscillator (currently at 90) and form a higher base. Meanwhile, upside will be capped at 15500 as it is 161.8% external retracement of the last fall (14754-13596), at 15466.
 
In line with ICICI Securities view, relative outperformance of broader markets endured despite extended profit booking in the benchmark, highlighting inherent strength. In the process, the Nifty midcap index scaled a fresh all-time high. However, the Nifty small cap index is still 16% away from life-time highs. Hence, ICICI Securities expect catch up activity to be seen in small caps. ICICI Securities believes any extended breather from here on would get anchored around key support threshold of 14900, as it is confluence of 23.6% retracement of post Budget rally (14470-15432), at 14998 coinciding with last week’s low of 14977.
 
The choppiness in midcap banks and private banks continued as select leading banks again slipped from higher levels. However, PSU banks witnessed long additions. In the option space, 37000 Call has the highest open interest, which would be a hurdle on the higher side. However, on the downside, 36000 and 36500 Put continue to hold noteworthy OI, which should provide support. Daily Index F&O recommendations are to Sell Nifty 14800 Put (February 25 expiry) in the range of Rs 49-51 and to Buy Bank Nifty in the range of 36400-36500.