Nifty: A Nifty bounce after gap-down could occur this time too

Is the ‘gap-down’ opening within the Sensex and Nifty on December 19 signalling a rebound out there? The indices opened hole down 1.3% on Thursday after the US Fed tempered the market’s expectations of rate of interest cuts.

A spot-down occurs when a inventory opens at a a lot lower cost than the place it closed the day earlier than, leaving a ‘hole’ on the value chart that’s thought of an indication of investor panic. The Sensex and Nifty fell 1.5% the following day.

In response to Samco Securities, the preliminary fall on Thursday was the 107th occasion since 2000 and the forty first since April 2020 when the indices opened with a gap-down of 1%.

The brokerage mentioned since 2020, the Nifty had rebounded 73-83% out of the 40 events of comparable gap-downs over the following two months. Equally, since 2000, the index has bounced on 67% of the 106 events over the next two months. “If this historic pattern persists, the present drop might characterize a strategic shopping for alternative for buyers,” mentioned Samco’s analyst Raj Gaikar.