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Sensex (54318) / Nifty (16259)

The global trading screen early in the morning was pleasant and as a result, our markets started with a modest upside gap slightly above 15900. However, the momentum accelerated as the day progressed across the heavyweight spaces to send Nifty comfortably beyond 16250 on a closing basis. Unlike recent sessions, the upward rally was here to stay and did not give up in the latter half. The robust recovery session concluded with whopping 2.63% gains to bring back a wider smile in traders’ fraternity

With reference to previous commentary, we had clearly mentioned how markets are deeply oversold and requires a small relief on the global front to rebound sharply from their key supports. The moment we surpassed 16100, the short sellers were forced to go on the back foot, which provided some impetus to the convincing move beyond 16250. As of now, yesterday’s rally should only be construed as a pull back; because markets were deeply oversold and needed some breather. So rather than getting complacent, it’s advisable to adopt ‘One step at a time’ strategy. Yes, the kind of recovery we witnessed yesterday, it is a bit encouraging one and indicates a possible extension towards 16350 – 16500. Hopefully the global screen remains intact like this, which could provide a much needed push to extend the move. On the flipside, 16100 – 16000 has now become a sacrosanct support and till the time, we do not slide below it, traders can use declines to buy into.

Exhibit 1: Nifty Daily Chart

Nifty Bank Outlook - (34302)

Bank Nifty as well started on a positive note and the momentum continued throughout the session to eventually end with strong gains of over two percent tad above 34300.

Following the bullish reversal candlestick pattern on Monday known as 'Inside Bar' the bank index finally witnessed a muchawaited bounce back yesterday. The way some of the counters moved within this space and the way the bank nifty has closed certainly bodes well for the bulls. However, as mentioned above this upmove should only be considered as a pullback as of now, and a one step at a time approach should be taken. As far as levels are concerned, 34800 - 35000 are the next levels to check on the pull-back moves whereas, on the flip side, 34000 - 33800 is the immediate support zone. As long as the mentioned support levels hold, intraday dips can be taken to add the long positions.

Exhibit 2: Nifty Bank Daily Chart

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