Saturday Trading Mood: New all-time highs, smoother operations, higher stability

Continuing its upward trend for the third consecutive week, the Nifty 50 index reached a new all-time high of 22,419.55 on Saturday, March 2, 2024, triggering a fresh upside for the March series. This Saturday’s trading session, compared to the January 20 session, which witnessed abrupt spikes on counters and arbitrage opportunities, was smoother, with just a slight increase in volume in the first hour. This was followed by sideways momentum in the range of 22410 to 22350 during the second session. Also, traders were better prepared due to the prior notice, unlike the last Saturday trading session.

Lack of volumes

Arun Kumar Mantri, Founder of Mantri Finmart, said, “It has been a lacklustre one-hour trade on the special session, where good action was seen in the mid and smallcap indices, which saw massive gains, while frontline counters showed a sideways trend. The price filters on the circuits also weighed on some stocks, and as the delivery taken on Friday is not allowed to be sold today, it has kept volumes on the lower side. On the flip side, market participants have been carrying bullish sentiments from the last trade, which has kept the market on the bullish side.’’

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Action was seen in the midcap space and positions were being prepared ahead of Monday’s midcap expiry. Strong volumes were seen in the first hour in the auto space, as stocks like TVS made strong volume gains.

Among the sectoral indices, Nifty Metal and Nifty Consumer Durables emerged as the top performers for the week, showcasing substantial gains. In contrast, Nifty Media and Nifty Healthcare saw significant declines, emerging as the leading losers in the market for the week.

Momentum to continue the next week

“We expect the momentum in auto stocks to continue after the auto sales numbers, followed by the infra and capital goods counters, which saw massive buying interest. Cement stocks may remain on the muted side as per today’s price action. Stocks like Tata Motors, TVS Motor and L&T may carry positive momentum in the next week as well,” said Mantri.

Sudeep Shah, Head of Derivative and Technical Research at SBI Securities stated that, “In the next few trading sessions, we recommend continuing to prioritise largecap stocks as their charts indicate strength and stability. Largecaps tend to offer more reliable investment opportunities compared to mid and smallcaps, which may exhibit higher volatility, especially ahead of the upcoming general elections. Exercise caution in the mid and smallcap space as they have lagged behind frontline indices in recent sessions. This disparity suggests potential volatility and increased risk in these segments.”

Nifty outlook

Shah highlights that the Nifty has formed a bullish candle and a prominent long lower shadow on the weekly scale. This extended lower shadow signals robust buying activity at lower levels. As the index is trading at all-time high levels, all the moving averages and momentum indicators are suggesting strong bullish momentum in the index.

“Going ahead, the index is likely to continue its northward journey in the coming week. On the upside, it is likely to test 22640, followed by 22750 in the short term. On the downside, the previous swing high zone of 22125-22140 is likely to act as an immediate support, followed by the 20-day EMA (exponential moving average) zone of 22040, ” added Shah.

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