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Sensex (55320) / Nifty (16478)

US markets had a weak session overnight and as a result, the SGX Nifty yesterday morning indicated a sluggish start. In line with this, our markets opened lower and post the initial nerves, the benchmark index settled around the 16250 mark. In fact as the day progressed, the fair bit of buying was observed in many heavyweight constituents. This momentum accelerated in the latter half of the day to conclude the session with over seven tenths of a percent gains convincingly above 16400.

With reference to our previous commentary, 16300 – 16260 acted as a sheet anchor and the hope of recovering from those levels turned into a reality. Fortunately, the buy on declines strategy once again played out well and the way we managed to close convincingly above 16400, bodes well for the bulls. Now, SGX Nifty is indicating a big gap down opening however if things turns during the session and if global market supports then we may see Nifty going back to 16600 – 16700 levels in the coming sessions. At our end, the IT and banking started participating late yesterday, but when they got involved, market just took off to conclude the weekly expiry on a pleasant note. As far as immediate supports are concerned, 16350 followed by 16300 – 16260 should be seen as key levels. Traders are advised to remain positive but yes aggressive positions are not advisable till the time trend becomes strong.

Nifty Daily Chart

Nifty Bank Outlook - (35085)

Bank Nifty as well started on a negative note and as the day progressed even though there was buying seen in the broader markets from the lower levels; this space kept consolidating within a range for the major part. During the fag end of the expiry session there was eventually positive traction that led the bank index to reclaim 35000 and end with gains of 0.40%. Last few sessions, we have been mentioning key support around 38.2% retracement around the 34800 mark and even though it got breached in the morning session yesterday it is still well-defended on a closing basis. The formation on the daily chart is not that strong as compared to the benchmark index and there is a resistance around the 35400 - 35500 zone however if that is taken out then we can expect strong positive momentum in the coming week. As of now we still maintain a positive bias as long yesterday's low around 34600 is protected and traders should ideally have a buy on dip strategy.

Nifty Bank Daily Chart

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