The Nifty seems to have taken a breather by moving within a sideways range last week. The important overhead resistance of 7550 is not far away and the index has been testing that hurdle in the last 3-4 sessions, which is a positive indication and signals the possibility of an upside breakout of the hurdle.
The sharp opening upside gaps of 2nd and 3rd March are still intact and unfi lled after 4-5 sessions, which is positive. The negative sequence of lower tops and bottoms of the last 6-8 months and the length of bounce-backs indicate that another 1 or 2 weeks of up-move is likely.
One may wait for the Nifty to show a decisive upside breakout of the hurdle of 7550-7600 and participate in the upside rally. On the up-move sustaining above the said hurdle, the Nifty is expected to reach 7750-7800 in 2-3 weeks. Banking, Auto, Realty, Metals, FMCG and Pharma are expected to outperform in such an upmove.
The Nifty is stuck in a range as buying was seen on every decline as short-term trend got in bulls’ grip and holding the gains above its 50-DMA, but at the same time it has been taking hurdle near 7539-7550, which is 61.80% retracement of the entire fall of this year from 7972-6825 levels.