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Sensex (58927) / Nifty (17547)

Global markets have seen a relief rally after some bumpy rides recently and this has brought back optimism in our market as well. We started the day with a decent gap up owing to favourable global cues. In fact as the day progressed, the momentum kept accelerating across the board to eventually register a new high convincingly beyond the 17800 mark.

Our markets had a remarkable comeback in last three sessions after testing the key support zone 17350 – 17250. We have clearly outperformed the global peers as they just managed to give some relief but our markets have given a v-shaped recovery to clock fresh highs. Honestly speaking, this recovery beyond 17600 has certainly surprised us but eventually market is superior. Ideally, after market surpassing previous highs, our cautious stance should have been negated; but there are a few time wise projections as well as negative divergence in ‘RSI-Smoothened’ oscillator, clearly holding us back. Hence we would keep reassessing the situation closely for next couple of days. As far as levels are concerned, every 100 points psychological level from here would be seen as immediate resistances i.e. 17900 – 18000. On the flipside, 17700 – 17650 are to be seen as key supports.

Nifty Daily Chart

Nifty Bank Outlook - (36945)

We began the weekly expiry day with an upside gap and saw smart buying interest right from the word go to reclaim 37600 in the initial hour of trade. As we progressed, the momentum remained strong to extend the upmove beyond 37800. Eventually, we concluded the day with a fabulous gains of more than two percent to previous day’s close. After seeing the closing below the support zone around 37000 on Wednesday, things didn’t look appealing. But, the kind of comeback we saw yesterday was indeed remarkable, amidst recovery in the global market. Considering yesterday’s development, we believe market may continue to march in northward directions in the coming sessions. However, we won’t advise being carried away as the risk reward ratio at this point in time is not favorable. As far as levels are concerned, the immediate support is placed around 37200- 37300 zone; whereas, banking index may find resistance around 38000 and 38200 levels.

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