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Sensex (50540) / Nifty (15175)

During the last week, markets started on Monday on a pleasant note owing to some recovery in the global markets. On the same day, Nifty managed to move beyond 14900 first and on the following day, the sturdy wall of 15000 was thrashed convincingly. Everything looked hunky dory but all of a sudden the global markets again became nervous and due to this, we witnessed a decent correction to sneak below this psychosocial level. But market was not done with its surprises as we saw a spectacular rally on Friday to push the Nifty at 2-month high.

We always say ‘All’s well that ends well’ and last week’s price action is the perfect example of it. Out of first four sessions, the bulls and bears had their equal share and as expected the Friday became the real decider. The real catalyst behind this optimism was the cooling off in the global bourses as well as various asset classes. Since, our markets had the inherent strength; this development provided the impetus for the move towards 15200. Now, the way things are placed, retesting of the record high of 15431.75 looks eminent. Before this, 15220 – 15340 are the levels to watch out for. On the flipside, it is important to note that the immediate base has shifted higher towards 15000 – 14900, which is an encouraging sign.

Looking at the broad based participation on Friday, especially the way banking space is poised; we will not be surprised to head towards record high in the first half of this week. In fact, if all the other factors support, we may see new highs also in the coming sessions. However having said we should not become too complacent and should keep a close track of how global markets behave over the next few days. Any aberration on this aspect may again dent the possibility of a short term rally. It’s better to take one step as a time and continue with a stock specific approach by following proper risk management.

Nifty Daily Chart

Nifty Bank Outlook - (34607)

It was indeed an action packed week for our market, as we kick started with and upside gap and first managed to surpass the resistance around 33300 mark and then extended the move beyond 34000. Things were all set to surpass the next hurdle 34300-34500 but once again the weakness in the global market dented the trader’s sentiments; we saw BankNifty sliding back to 33300. On Friday, market once again gained strength and we saw a sharp rally to almost reclaim 34700 mark.

Finally after quite some time, we witnessed outperformance from the banking space. As we mentioned previously; any sustainable move in benchmark index without such outperformance from BankNifty is impossible. Previous week, we saw 33300 mark acting as a strong demand zone and considering the rally seen of Friday; the base has now shifted higher to 34000-34200. On the higher side, we expect the ongoing rally to extend first towards 36300- 36500 and then towards life time highs. Hence, traders’ are advised utilizing intraday declines if any to add-on fresh longs.

Nifty Bank Daily Chart

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