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Sensex (39194) / Nifty (11724)
During the last week, the global set up was excellent throughout the week, in fact, US markets hastened towards all-time highs after recent underperformance. However, we failed to capitalise on this positive development as some of the domestic wounds still continues to hurt us badly. Barring Thursday’s session, there was no respite in our markets. Fortunately, despite various attempts to breach 11600, our benchmark managed to defend key levels and went on to confirm a weekly close tad above the 11700 mark.
During the early part of the week, index slipped below recent swing low of 11769, which triggered sharp selloff to retest sub11700 levels. Despite a strong selling pressure, the Nifty managed to hold key support zone 11630 – 11591. These levels were critical supports because 11591 is the higher end of the ‘Upward Gap Area’ created post the exit poll numbers. And 11630 being the 161% Fibonacci retracement levels of the small up move from 11769.50 to 12000.35. This level coincided with the ‘Potential Reversal Zone’ as per the ‘Bullish Wolfe Wave’ structure, which is clearly visible on hourly chart. Despite a strong selling pressure on many occasions, we witnessed massive buying emerging in the zone of 11650 – 11630 and with Thursday’s colossal move, the said pattern has been validated. Yes, Friday’s decline was a bit unexpected for us; but we still remain hopeful and expect the index to breakout from the key hurdle of 11843.50. This would unfold the fresh upward leg of the rally to test 12000 first and then possibly fresh record highs soon. This optimistic approach remains valid as long as we are trading above the sheet anchor support of 11630 – 11591.
Nifty Bank Outlook - (30628)
During last week, the Nifty Bank index formed a support base around 30200 and pulled back higher in Thursday's trading session to rally beyond 30800. However, the index gave up the gains on Friday and ended the week on a flat note. If we observe the lower time frame (hourly) chart, it is seen that the index resisted around a falling trend line in Friday's session. On the other hand, the index also has formed a support base around the 30200 mark. Going forward, we expect the index resume its positive momentum and a breakout above the range of 30765- 30825 will confirm the same. Hence, traders are advised to trade with a positive bias from a near term perspective till the support of 30200 is intact. The Nifty PSU Bank index showed some outperformance on Friday and has indicated signs of a pullback. Hence, stocks from this segment could show some decent up move in near term.
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