NIFTY Index Chart Analysis

NSE benchmark, the Nifty 50 index experienced rangebound movement during the truncated trading week, except for March 10, 2025, when it briefly moved beyond its prior trading range. For the rest of the week, the index largely remained within the previous week’s range, leading to a lack of follow-through action on the rally seen in the prior week. Additionally, trading volumes were lower compared to the previous week, further indicating the absence of strong momentum. The range for the truncated week was limited to 362 points.[EasyDNNnews:PaidContentStart]

During the last seven days, the index’s movement was limited to a small range of 432 points between 22,245-22,677. This tight base may be sustained for eight or 13 trading sessions, which are Fibonacci numbers. Tight bases normally lead to an impulsive move in the breakout direction. The 20 DMA is now just 0.23 per cent above the current price. The index retraced exactly 38.2 per cent of the previous downswing. The counter-trend consolidations end at 38.2 to 50 per cent retracement levels.

The 38.2 per cent retracement level is at 22,668, and the 50 per cent retracement level is at 22,886. For a confirmed upside reversal, the index must be sustained above this zone. For a confirmed uptrend, the index must form a higher low and a higher high above 23,807. Before that, there are several resistances at 50 DMA (23,043) and 200 EMA (23,420). On a weekly chart, the Nifty has been facing resistance at a sloping trend-line for the last few weeks. This trend-line is nothing but the support line of a falling wedge.

As the breakdown happened on the downside, the pattern implications are no longer valid on the upside. In any counter-trend bounce, it must close above the 10-week average of 22,956. The weekly and daily RSI is in the bearish zone. The relative rotation graphs (RRG) indicate that Nifty Metal, Nifty Private Bank, Fin Nifty and Bank Nifty are positioned in the leading quadrant, with relative strength and momentum rising, suggesting they may outperform the Nifty 500 in the near term.

Meanwhile, the pharmaceutical, IT and healthcare indices have moved into the weakening quadrant, indicating a loss of momentum. The media, realty, consumer durable and PSU bank indices are in the lagging quadrant, signalling a potential underperformance. On the other hand, oil and gas, FMCG and automotive indices are in the improving quadrant, and any further improvement in relative strength could lead to outperformance. These sectors warrant close attention.

In the near term, the market is likely to consolidate further within the 22,245- 22,677 range before taking a directional bias. The high and low of this range will act as resistance and support levels, respectively, and a breakout on either side could trigger a sharp directional move. It is advisable to wait for a decisive breakout before taking positions. Until then, avoid leveraged positions, refrain from trading in large quantities, and focus on stock-specific opportunities.

STOCK RECOMMENDATIONS
SBI CARDS AND PAYMENT SERVICES ................... BUY ............... CMP ₹839.55
BSE Code : 543066
Target 1 .... ₹915 
Target 2 ..... ₹940 
Stoploss....₹811 (CLS)

Established in 1998, SBI Cards and Payment Services Limited, a subsidiary of the State Bank of India (SBI), is India’s largest pure-play credit card issuer. The stock has recently witnessed a cup-like breakout pattern, followed by an upward move. However, after this strong rally, it retracted from the higher levels on the back of below-average volumes. During this retracement, the stock successfully retested the breakout point, providing a fresh buying opportunity. From a technical standpoint, the stock is currently trading near its 50-day moving average (50 DMA) and is comfortably placed around 11 per cent above its 200-day moving average (200 DMA). It is also hovering near the breakout level of a falling supply line, which connects the highs of the last one month.

A breakout above this supply line is likely to trigger a resumption of the uptrend. On the weekly time frame, the stock has formed a tight consolidation range, suggesting a potential trending move on the upside. The 14-period RSI is rebounding after forming a base near its nine-period average, reinforcing a positive bias. Furthermore, the weekly MACD is trending northward while sustaining above its nine-period average, further validating the bullish sentiment. Buy this stock above the level of ₹852-854 for a target price of ₹915-940 and keep a stop loss at the level of ₹811.

SOM DISTILLERIES AND BREWERIES ................ BUY ............... CMP ₹131.00
BSE Code : 507514
Target 1 ...... ₹144 
Target 2 ..... ₹154 
Stoploss.....₹117 (CLS)

Som Distilleries and Breweries (SDBL), incorporated in 1993, is engaged in brewing, fermenting, bottling, canning, and blending beer and Indian made foreign liquor (IMFL). It is the flagship company of the Bhopal-based Som Group, with a production capacity of 15.2 million cases per annum (MCPA) of beer and 0.6 MCPA of IMFL. It is India’s first company to own a portfolio of spirits, beers, ready to drink along with rectified spirits (RS), and ethyl neutral alcohol (ENA). The company has made its mark across the country and the world by catering to the taste of the customers of particular regions. Technically, the stock has successfully closed above the pivot level of a 25-week consolidation, indicating a bullish breakout. It is trading above the key moving averages, including the 20 DMA, 50 DMA and 200 DMA, as well as the moving average ribbon, reinforcing a strong uptrend.

From an O’Neil methodology perspective, the stock has an RS rating of 82, signalling outperformance compared to the other stocks. Meanwhile, the buyer demand at A- reflects strong recent accumulation. The daily MACD remains bullish, showing strong momentum, and the 14-period daily RSI has shifted into a super bullish zone, continuing to trend higher. Additionally, the Elder Impulse System has formed a series of bullish bars, confirming the positive bias. Given these technical indicators, the stock presents a buying opportunity in the ₹128-130 range, with a target price of ₹144-154 and a stop loss at ₹117.

*LEGEND:  ◼ EMA - Exponential Moving Average.  ◼ MACD - Moving Average Convergence Divergence  ◼ RMI - Relative Momentum Index  ◼  ROC - Rate of Change  ◼ RSI - Relative Strength Index
(Closing price as of March 18, 2025)

Disclaimer : Above recommendations are based on various technical parameters and any fundamental input has not been considered for the recommendations. Follow strict stop loss for the recommendation.

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