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Sensex (60747) / Nifty (18101)

On Friday, the US markets had a splendid rally after the improved Job data and economic activity survey, which indicated cooling off an inflation. The reaction of this development was visible yesterday morning across the Asian bourses. We too started the week on a pleasant note and then extended gains in the initial hours. Around the mid-session, the Nifty hastened towards the 18100 mark. However, a small bout of profit booking at the start of the second half dragged index back to 18000. Fortunately, the buying resumed in the final hour to reclaim 18100 on a closing basis.

With yesterday’s strong move, the Nifty managed to recoup nearly one and half a percent from last three sessions’ loss. Importantly, we have closed comfortably above Friday’s high, which is a sign of strength. Referring to our previous commentary, we had mentioned how markets are a bit oversold and since we have reached the lower end of the recent trading range (17800 – 18300), the bound back cannot be ruled out. This move has panned out and now the way we have closed yesterday, a follow up move in coming session could bring back the lost mojo in the market. As far as levels are concerned, 18200 – 18300 remains a sturdy wall and only a sustainable breakout from the same, would unfold the next leg of the rally.

Nifty Bank Outlook (42583)

Bank Nifty as well started the week on a positive note and as the day progressed it extended the morning gains. Intraday dip got bought into that augured well for the bulls and Bank Nifty eventually ended with gains of 0.93% at 42583.

It was a great sigh of relief for the bulls as the bank index managed to defend key support levels and have triggered a bounce back. Considering the re-emergence of strong buying in key heavyweights it indicates that this positive momentum would continue however we are still not out of woods, and it is crucial for this high beta index to surpass some key levels to resume the uptrend. In such a scenario, strong overhead resistance is seen in the zone of 43000 - 43500. On the flip side, 42200 - 42000 is the immediate support whereas the sacrosanct support remains around 41500. As the result season kicks in, major action might be seen in stock-specific trades and hence one should focus on such counters that may give outperforming moves.

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