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Sensex (58065) / Nifty (17274)

US markets witnessed a spectacular recovery overnight on Monday to conclude with healthy gains. This overnight development lifted overall sentiments across the globe and to mirror this, our domestic markets had a massive bump up at the opening. In the initial trade, these gains extended a bit and then thereafter, key indices remained sideways by maintaining its sturdy posture. Eventually, the Nifty ended the session convincingly above 17250 with a couple of percent gains.

After Monday’s correction, our markets finally found its mojo back. So if we take Friday’s rally into a consideration, Monday’s move should only be interpreted as a pull back. Now, the global sentiments seems to have improved a fair bit across asset classes, which is likely to provide the much needed tailwind for our markets. In our sense, extremely oversold US markets are likely to continue their recovery mode and hence, we expect the Nifty to extend Tuesday’s gains in the remaining part of the week. As far as levels are concerned, 17000 – 16800 is to be seen as sacrosanct zone now, before which 17100 is to be treated as immediate support. On the flipside, a move beyond 17200 results into a negation of recent corrective trend.

Nifty Bank Outlook (39110)

On Tuesday, Bank Nifty as well started with a gap up opening and during the first hour it witnessed a strong positive traction. Post that the positive momentum continued as minor intraday dips got bought into and as the bank index gradually moved higher to eventually end with strong gains of 2.84% at 39110.

In our last two outlooks, we clearly mentioned the formations of strong bullish engulfing candle on Friday and traders to maintain positive bias. Now the way prices have bounced back it certainly augurs well of the bulls and we are also witnessing another strong formation that is similar to bullish kicking candlestick pattern. In addition, prices have also sustained above 50 EMA on the daily chart indicating momentum back with bulls. Hence, we reiterate to maintain positive bias and use any dips as a buying opportunity. As far as levels are concerned, immediate support is at 38800 - 38400 whereas resistance is at 39400 - 39800 levels.

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