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Sensex (52773) / Nifty (15869)

We had a gap up opening yesterday despite SGX was indicating a flat start. In the initial hour, Nifty reached yet another milestone of 15900; courtesy to banking space. During the remaining part of the day, Nifty remained in a slender range by maintaining its positive posture. Due to minor profit taking towards the end, Nifty ended around the midrange by adding nearly four tenths of a percent to the previous close.

Market has been reaching new milestones almost every alternative day as one or the other heavyweight space keeps propelling it higher. Yesterday it was clearly the banking space who witnessed some sheer outperformance. But looking at last few day’s price action, if index continues to move higher, it would certainly be a slow and steady in nature. The daily range would widen only if we see some kind of profit taking on any specific day. As far as levels are concerned, we are at a kissing distance from the magical figure of 16000 and hence it’s merely a formality now.

At current juncture, we would advise momentum traders not too get complacent and keep booking profit on existing positions. Pricewise there is no weakness as such in the market but looking from a risk management point of view, it’s advisable to stay light and avoid taking leveraged positions (especially overnight). The immediate supports are now placed at 15800 – 15700 – 15600. The first sign of real weakness would come only after sustaining below 15600.

Nifty Daily Chart

Nifty Bank Outlook - (35248)

Despite not so encouraging sign from global peers; we manage to kick-start the day in green tad above 35000 mark. Similar to Monday’s session we saw sharp move in initial hour of trade; however, it was on the upside yesterday. The banking index moved almost towards 35300 mark but then lacked momentum and entered into the consolidation mode for major portion of the day to eventually conclude the day with the gains of 0.85%.

It’s the second consecutive session wherein the BankNifty has shown some outperformance after quite some time. As mentioned in the previous article, if banking index has to regain strength then it’s very important to breach its immediate trendline resistance at 35650 levels. Once we manage to convincingly sustain above it then we may see a catch up move that can certainly propel the next leg of the rally for the benchmark index. At this point in time, we would advise trader to wait and watch and avoid aggressive bets in system. On the flip side, support is placed around the previous breakout levels seen at the previous swing high around 34300- 34400.

Nifty Bank Daily Chart

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