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Sensex (58130) / Nifty (17324)

During the last week, we had a bumper opening on Monday at new record highs citing to cheerful mood across the globe. This head start certainly set up the tone for the entire week as markets didn’t look back from thereon. Everyday our benchmark index was making new high and in the process even reached the millstone of 17000. In fact it didn’t stop there as we witnessed a continuation of the upward trajectory in last couple of sessions; courtesy to stellar comeback from heavyweight RELIANCE who single-handedly propelled Nifty beyond 17300. Eventually, it happened to be yet another spectacular week for our markets as the bulls added another 3.70% to their kitty.

Nifty has been enjoying a strong Bull Run since last 16 – 17 months and in last few weeks also, it gave some mesmerizing moves. Although the recent momentum has been exceptionally strong, we can see some extreme levels in benchmark index now. If we take a broader view, we can see Nifty reaching the 200% ‘Fibonacci Retracement’ of the last year’s massive decline from Jan’20 high to March’20 low. Also time- wise, Nifty has entered 7th zone as per ‘Fibonacci Time Series’ on the monthly time frame chart. We do not want to sound pessimistic but since couple of important key ratios are coinciding at current juncture; it will be unfair to overlook them.

To be on the safer side, we advise traders to keep booking profits in the rally and avoid taking aggressive longs for a while. Yes, momentum traders can still continue with their stock specific trades; but needs to follow strict stop losses and booking timely profit is advocated. As far as levels are concerned, 17400 – 17500 are to be considered immediate hurdles; where we would certainly avoid being complacent. On the flipside, 17200 – 17050 are to be seen as key supports for this week. The first sign of weakness would start below 17000 after which the crucial make or break support zone of 16700 – 16600 would be tested.

Nifty Daily Chart

Nifty Bank Outlook - (36761)

On Friday, Bank Nifty started on a flat to positive note and made an attempt to sustain above the 37000 levels. However, this attempt once again got failed and the bank index eventually ended the session with minor loss at 36761. Even though the bank index ended with handsome gains during the week and managed to close above the recent hurdle of 36200 - 36300 the follow up move post breakout is missing. Now in the last few sessions, we have seen 37000 - 37300 acting as a resistance. Going ahead, we sense the previous resistance around 36000 - 36300 will now act as support whereas 37000 - 37300 may continue to act as resistance. As long the bank nifty holds in this range one should continue with stock specific approach and a momentum move can only be expected on a breakout from this range.

Nifty Bank Daily Chart

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