Across-the-board buying backed by strong global cues took the Nifty50 above its 200-day moving average on Thursday with the passage of the key event of the Federal Reserve's scheduled policy review.
The US central bank's first pandemic-era rate hike, along expected lines, and upbeat commentary on the world's largest economy sent positive vibes to global financial markets.
The 50-scrip benchmark is now above five out of six simple moving averages. A strong recovery in the market in the past few sessions helped the index take out its long-term moving average, currently placed at 16,997.
The Nifty50 rose as much as 369.3 points or 2.2 percent to 17,344.6 at the strongest level of the day, coming within 36 points of its 100-day moving average.
| Period (No. of days) | Simple moving average | Signal |
| 5 | 16,890.5 | Bullish |
| 10 | 16,551.4 | Bullish |
| 20 | 16,713.1 | Bullish |
| 50 | 17,262.4 | Bullish |
| 100 | 17,380.7 | Bearish |
| 200 | 16,997.4 | Bullish |
Moving averages are technical indicators used to determine whether a stock or an index is likely to continue or reverse its current trend.
"Most sectoral indices are contributing to the move and the broader indices also seeing traction in sync with the trend... We feel sustainability above 17,350 in Nifty would pave for higher levels, else market participants should prepare for some consolidation," Ajit Mishra, VP-Research at Religare Broking, told CNBCTV18.com.
He now sees a cushion for the index in the 16,800-17,000 zone and advises participants to focus on identifying sectors and stocks showing resilience.
The Nifty Bank, however, is giving neutral signals. At the day's high, the banking index added 863.7 points or 2.4 percent to touch 36,611, still about 0.2 percent from its 200 DMA.
Financial services counters have the maximum weightage of 36.1 percent in the Nifty50 universe, followed by IT (17.7 percent) and oil & gas (12.7 percent).
| Period | SMA | Signal |
| 5 | 35,418.1 | Bullish |
| 10 | 34,581.9 | Bullish |
| 20 | 35,579.0 | Bullish |
| 50 | 37,117.8 | Bearish |
| 100 | 37,204.5 | Bearish |
| 200 | 36,696.1 | Bearish |
(Edited by : Akanksha Upadhyay)
