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Sensex (61275) / Nifty (18016)

The US markets reacted negatively to unfavorable inflation numbers overnight. The Asian screen was clearly mirroring this development in the morning as we witnessed weakness across the globe. We too started the session on a sluggish note and remained slightly under pressure in the first half. However, markets just took off in last 45 minutes of the trade to add another half a percent gains; importantly reclaimed 18000 for the first time after 25th January.

For most part of the session yesterday, our key indices remained muted; but a sudden gush towards the fag end triggered a strong rally to send Nifty beyond 18000 on a closing basis. In our previous commentary, we had mentioned how market is showing early signs of breakout and with late surge yesterday, we have finally managed to go past the sturdy wall of 18000. Taking a glance at the daily time frame chart, we can see a breakout getting confirmed from a recent ‘Falling Trendline’, which augurs well for the bulls. Now, if there is no aberration globally, we are good to come out of the long slumber phase. Most likely, in such kind of tail end moves, we get gap up opening on the subsequent session. If this doesn’t happen, then traders should use any dip towards 17960 – 17920 to add long positions. The major support is now visible at in the zone of 17900 – 17800.

On the flipside, 18100 – 18200 are the immediate levels to watch out for. However, we are of the opinion that if banking starts participating the way it did yesterday, we may see Nifty even hastening towards 18350 – 18500 in coming days. Hence, traders are advised to keep a close tab on all the mentioned scenarios and brace themselves up for a good broad-based rally in the market ahead of the monthly expiry.

Nifty Bank Outlook (41731)

Bank Nifty started on a positive note however as the day progressed there were swings that were seen on both sides of the trend. During the second half prices were creeping around the low point of the day however there was a sudden gush of buying during the last 45 minutes that pushed prices higher to eventually end with gains of 0.20% at 41731.

On the daily chart, not much has changed as we are seeing a small bullish candle however if we consider the intraday charts then a strong surge can be seen during the fag end that augur well for the bulls. On the weekly expiry day, key resistance to watch would be around 42000 which is also around the budget day high; once prices sustain above it a bullish breakout can be confirmed. Considering the last hour's buying and positive development in key heavyweight counters we sense the breakout to happen very soon. Traders are hence advised to remain upbeat and continue to use dips as a buying opportunity. In such a scenario, intraday support is seen in the zone of 41500 - 41400 levels.

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