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Sensex (63523) / Nifty (18857)

After a strong second half on Tuesday, trading activities for our markets started on a positive note. Similar to Monday, it appeared that prices would reach new highs for Nifty in the initial few minutes. However, profit booking caused prices to dip below 18800 in the first couple of hours. Once again, this dip was bought into during the second half, gradually pushing prices higher towards the morning highs. The day ended with gains of 0.21%, slightly above 18850.

While SENSEX reached a fresh new high yesterday, Nifty missed this achievement by a whisker. We believe that Nifty will likely reach this milestone in the early minutes of the coming session. The question now is whether there is enough steam to drive prices towards the psychological level of 19000 and beyond in the near future. Our view remains positive, but for the same, it requires Bank Nifty to become active after trading in a range for almost a month. Once momentum returns to the banking sector, it will trigger optimism across the board and lead to trending moves in index-specific trades. Until then, the market may continue to experience choppy movements especially index specific, and it is advisable to stick with a buy-on-dips strategy. In terms of price levels, not much has changed, and the immediate support zone remains at 18700 - 18600. On the upside, 18940 - 19000 can be considered as immediate resistance for the weekly expiry session.

Traders should keep an eye on the aforementioned levels for the weekly expiry trade and focus on thematic moves, as they have been delivering outperforming results.

Exhibit 1: Nifty Daily Chart

Nifty Bank Outlook (43859)

Post yesterday's tail end surge from the critical support, the Bank Nifty started the proceedings on a cheerful note. Initially, in absence of follow-up buying index sneaked lower towards 43700; but strong buying emerged at the lower levels to recoup all the losses and settle in green with the gains of two tenth of a percent.

Technically speaking, no relevant price action was observed in yesterday's session, in fact it's nearly a month now that the banking index has been vacillating in a range of 43400-44500 and we are awaiting a decisive move beyond this range for a clarity in the upcoming trend. However, buying interest at the lower levels clearly suggests bulls remain hopeful and are not ready to give up so easily. Moreover, the other similar index, FINNIFTY has clocked fresh record high today and hence, its a matter of time, we would see BANKNIFTY following its peers. As far as levels are concerned, 43600-43400 continue to provide an immediate cushion; whereas on the upside 44000 followed by 44200 are to be treated as hurdles now Traders are advised to adopt buy on dips strategy until we respect the above-mentioned support zone on a closing basis

Exhibit 2: Nifty Bank Daily Chart

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