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Sensex (60223) / Nifty (17925)

Yesterday morning, most of the global bourses were a bit nervous and hence SGX Nifty was indicating a sluggish start. At the opening, our markets completely shrugged off these cues and opened on a positive note. In the initial hours, Nifty looked a bit tentative on the back of strong profit booking seen in IT heavyweights; but banking provided the helping hand. It not only came for a rescue but managed to lift the benchmark higher throughout the remaining part of the session to add another seven tenths of percent to the bulls’ kitty.

We are now shy away from the psychological mark of 18000 and the next leg of the rally would start after surpassing it convincingly. Till then it would be a daunting task for the bulls to overcome the sturdy wall of 18000 – 18100. The way tables have turned in favour of the bulls in last couple of weeks, it would merely be a formality to overcome this hurdle and then move towards the previous highs. But before this, we are likely to see some in between profit booking considering the sharp run up in such a short span.

Hence momentum traders are advised to be watchful of their entry points now and should ideally look to take some money off the table around important resistances. On the flipside, 17800 followed by 17700 should be treated as key supports where some buying is likely to re-emerge.

Nifty Daily Chart

Nifty Bank Outlook - (37696)

The banking index has outshined the market consecutively for the fourth trading session with its extravagant performance. The index has surged over 2.32 percent and breached its previous swing high in a decisive manner to get itself placed above all its major exponential moving averages.

On technical parameters, the index has maintained its uptrend post strong bullish pattern formation and is currently placed at the higher band of the Bollinger on the daily time frame. At the current juncture, the index is placed at a critical zone of the previous breakout that might act as a short-term hurdle. However, the technical indicators are well versed in favor of the bulls, and any dip towards 36500-36800 would get utilized by them. While on the flip side, any breach above 38000 with authority should be seen as the beginning of the next set of a rally.

Nifty Bank Daily Chart

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