HDFC Securities highlights that the Nifty has entered downgap area of 14919-15065 raising hopes of further upmove

HDFC Securities says that Indian benchmark equity indices ended higher for the second straight day, after recovering from a selloff seen in the morning. At close the NSE Nifty 50 index gained another 1.1% to end at 14919.
 
Volumes on the NSE were in line with recent averages. Among sectors, Auto, IT, FMCG, Pharma gained the most, while PSU Bank index ended in the negative. The Nifty Midcap index ended 1.7% higher while the Smallcap index gained 1.2% by the close of trade.
 

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India's exports declined 0.25% to $27.67 billion in February while imports grew 6.98% to $40.55 billion during the month, according to provisional data released by the commerce ministry. The trade deficit widened to $12.88 billion in February as compared to $10.16 billion in the year-ago period. However, the trade deficit stood at $14.54 billion in January 2021.
 
Asia stocks reversed course giving up morning gains and European stocks fell as a senior Chinese official expressed wariness about the risk of asset bubbles in foreign markets and a recent bond market sell-off still weighed on investor sentiment. Lower commodity prices also weighed on indexes.  German retail sales fell sharply in January, dropping 4.5% on the month, showing the continued impact of these restrictions on Europe’s largest economy.
 
The number of new coronavirus infections globally rose last week for the first time in seven weeks, the World Health Organization said on Monday. 
 
Nifty has entered the downgap area of 14919-15065 raising hopes of further upmove. Advance decline ratio also rose in line with the uppishness in the Nifty. 14782 on the downside is a crucial level to defend.
 
After showing a sustainable upside bounce on Monday, Nifty continued its upside momentum on Tuesday and closed the day with handsome gains of 157 points. After opening on a positive note, nifty made an attempt to move up in the early part of the session. Intraday profit booking has triggered in the early mid part of the session and Nifty showed intraday weakness from the highs. Later on the market sustained the gains and more upside was seen towards the end. The opening upside gap has been filled completely during intraday dip.
 
Nifty is now placed at the verge of moving above and filling the opening downside (26 Feb) and upside (25 Feb) gaps- type of island reversal. Hence, the area of 14920-15065 is expected to be a crucial resistance zone for the market for the short term and a sustainable move above 15100 is likely to reverse the trend meaningfully.
 
Conclusion: The short term trend of Nifty continues to be positive and bulls seem to be gaining strength in the present upside bounce. The crucial overhead resistance to be watched around 15065 and a decisive move above this gap area could open chances of new highs for the market.