By Sacchitanand Uttekar The Nifty has formed a large bullish candle on the weekly charts and the current momentum can take the Nifty up to all-time highs in a very quick span of time, according to technical analysts.

They say it’s time to be bullish on PSU banks, Midcaps and pharma stocks. Where we are: Strong liquidity push from FIIs has been a key contributor for Indian markets and for our rupee to gain nearly by 3.39% from its February high.

Nifty is locked well within a 5 WAVE bullish structure which commenced post the establishment of a low on October 26, 2018 at 10004.55.

Currently, it’s at a cusp of ending its 3rd wave and beginning a corrective wave which would establish a further higher ground for the next surge. What is in store: The recent rally from 10,585 is about to witness termination and the final hour profit booking during the end of last week resulted with an occurrence of an ‘inverse hammer’ formation at the top of the wave which could be an early signs of reversals but a confirmation is awaited.

We believe that the corrective wave is in the offing which could provide participants with yet another opportunity to build longs, but after a meaningful decline or time consolidation.

Hence, traders are advised to refrain from fresh longs and book profits in their existing positions. What you could do: Strong seasonality factor complements the ongoing scenario as historically the months of March and April have relatively favoured the bulls.

Sector rotation remains the key for participating such dynamic moves.

Risk adherence could kick in soon and safer avenues like participation via quality large caps especially with major holding by FIIs, defensives like IT and Pharma could become the themes for the next bullish wave.

Market participants should utilise the forthcoming corrective wave to switch to quality irrespective of being at elevated levels. The author is DVP – Technical (equity), Tradebulls Securities.