Sensex, Nifty reclaim 200-DMA; may gain another 2.5% each

If the BSE Sensex and the NSE Nifty 50 cross their respective 100-DMAs, the benchmarks can easily rally another 2.50 per cent each.

World markets rallied sharply in trade on Thursday taking cues from the US counterparts, after the US Federal Reserve hiked interest rate by 25 basis points on expected lines at Wednesday night. This was the first rate hike since 2018, a gap of more than 3 years as policy makers battled Covid pandemic related economic slowdown during that period.

However, record high inflation (4-decade high) coupled with the Ukraine war related worries warranted a rate hike. The US Fed said it would continue with the policy tightening for the rest of the year.

Overnight, Dow Jones gained 518 points or 1.55 per cent to close at 34,063, while Nasdaq surged 487 points or 3.77 per cent to 13,436.

Similarly, Asian indices witnessed a positive start on Thursday morning. Hang Seng soared over 5 per cent, while Nikkei and Shanghai Composite surged over 2.50 per cent each.  Indian benchmark indices too saw another positive start with the BSE Sensex adding more than 1,000 points or 1.81 per cent to 57,844, and the Nifty 50 gaining as much as 287 points or 1.70 per cent at 17,262 levels, so far in the day.

In the process, the benchmark indices have reclaimed the 200-DMA, a significant mark that investors and traders seek from long term viewpoint. Will the indices be able to sustain above it or fall back? Here’s what the charts indicate for the coming sessions:

S&P BSE SENSEX
Likely target: 59,800 (after crossing 100-DMA)
Upside potential:  2.50%

The BSE Sensex opened above the 200-day moving average (DMA) and has managed to sustain in the green territory so far in the day. The 200-DMA is positioned at 56,906. The current price level is hovering near 57,870, its 50-DMA mark. The next hurdle comes at 100-DMA placed at 58,300 and upon conquering this mark, the next breakout could see a rally towards 59,800 level.   CLICK HERE FOR THE CHART
 
NIFTY50
Likely target: 17,800-17,850 (after surpassing 17,380)
Upside potential:  2.50%

With a strong gap-up on Thursday, the Nifty 50 has reclaimed the 200-DMA, placed at 16,997. The index does has a minor hurdle at 17,260, its 50-DMA, which seems to get surpass considering the overall strength on the chart. The crucial obstacle is at 17,380 level, which is its 100-DMA and the following rally could see a jump towards 17,800-17,850 levels. CLICK HERE FOR THE CHART

NIFTYBANK
Outlook: Trend is decent, but needs to cross 200-DMA

This index is still trading under the 200-DMA, set at 36,696 level. While the index does show strength and momentum that could see a rally toward this hurdle, the breakout or reliability of a bull trend emerges only after conquering the 200-DMA. At present, the support for the index falls at 35,500 level, shows the daily chart. CLICK HERE FOR THE CHART