Nifty reclaims 200-DMA to close above 10,800; book profit on rallies

A powerful day for the bulls as they pushed benchmark indices above crucial resistance levels towards the close of the trade on February 25. The S&P BSE Sensex reclaimed Mount 36K while the Nifty50 breached 10,800 on the upside thanks to positive global cues.

Approval of GST council to lower the tax rate on under construction real estate project added to the positive sentiment on D-Street. IT, banking and auto were the top contributors from the sectoral front while the broader indices managed to end marginally higher.

The S&P BSE Sensex closed 341 points higher at 36,213 while the Nifty50 ended at 10,880, up 88 points. The big news is that both Sensex and Nifty have turned positive for the year 2019 after February 25 rally.

As we head towards the expiry, volatility cannot be ruled out, suggest experts and investors should use rallies to exit long positions. The rise that we have seen from the lows of 10,585 is a welcome move but this is still a sell-on-rallies market.

“We have seen the index rebound from 10,585 and the move could well take the index towards 10,900,” Ritesh Ashar – Chief Strategy Officer – KIFS Trade Capital told .

“As we head towards expiry and key macro numbers, the bounce back could take the index towards 10,950-11,000 but at this juncture, we cannot say that bulls have taken control. It is still a sell-on-rise market,” he said.

Technically, Nifty formed a bullish candle and closed above its crucial long-term moving average of 200-DMA placed at 10,861.

On the options front, maximum Put OI was placed at 10,700 followed by 10,800 strikes while maximum Call OI was at 11,000 followed by 11,100 strikes.

Meaningful Put writing was seen at 10800 followed by 10750 strikes while Call Unwinding was seen at all the immediate strikes. Options band signifies a higher shift in a trading range between 10,777 to 10,985.

Stocks in news

Most real estate stocks pared gains towards the end of the session after the GST Council on February 24 cut tax rates on under-construction flats to 5 percent and affordable homes to 1 percent, effective April 1.

Adani Ports lost more than 8 percent after its subsidiary Adani Logistics decided set to acquire Adani Agri Logistics (AALL) from Adani Enterprises.

Jubilant Life Sciences climbed 2 percent as its subsidiary Jubilant Pharma launched unsecured bonds offering outside India.

Shares of Sharon Bio-Medicine were locked at 5 percent upper circuit despite USFDA inspected company’s API facility at Taloja.

Shares of JBM Auto rose 5.6 percent intraday after the company acquired a major shareholding in Linde-Wiemann.

Global Updates

European markets are trading higher as investors are monitoring the ongoing China-US trade talks.

Asian markets ended higher as Shanghai composite rose 5.6 percent to close at 2,961.28, while the Shenzhen component surged 5.5 percent to finish at 9,134.58.

Also, Hang Seng index jumped 0.52 percent to close at 28,959.30 and Nikkei was up 0.48 percent to close at 21,528.2. Kospi finished marginally higher at 2,232.56.