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Sensex (59745) / Nifty (17813)

On Friday, Nifty started on a positive note and then it witnessed choppy moves on both the sides. Eventually it ended near the opening levels with gains of 0.38% at 17813.

Despite some tentativeness around 18000, the undertone remained bullish and on a weekly basis, the bulls managed to add more than two and half a percent gains to their kitty. Last couple of weeks have been excellent for our markets as we recovered more than 1500 points in a span of merely 12 sessions. Things have completely changed price wise as well as sentiments wise. However, for the ongoing leg of the rally, 18000 stands as a sturdy wall and it would certainly be a daunting task to overcome it. Looking at last two days’ nervousness, it is quite clear why 18000 is considered to be a key level. Now, as long as Nifty remains above 17600 – 17500, there is no reason to worry for and hence, such declines should be used to add longs. The only caveat for this approach would be the overnight aberration in global markets. If nothing happens on this front, we are good to go beyond 18000 to witness a pre-budget rally.

For this week, the immediate resistance levels are placed around 17900 – 18000. Any move outside this range would trigger some momentum in major indices. Meanwhile, so many individual stocks did well during the week and hence, traders should continue focusing on such potential candidates as long as Nifty remains in a broad range of 400 – 500 points. Also, all eyes on banking space as it has shown some real strength this week and if Nifty has to surpass 18000, the banking certainly plays a vital role in it.

Nifty Daily Chart

Nifty Bank Outlook - (37740)

The banking index has been in a stellar bull run as it surged over 6.36 percent in the last week. The index is shy away from the psychological mark of 38000. It is placed well above all its exponential moving averages on the daily time frame, indicating inherent strength.

The index has settled on a strong note above the mean on the Bollinger band on the weekly time frame. And even on the oscillator front, 14 days RSI is situated in a comfort zone followed by the positive crossover of the MACD, affirming the stance to stay on the bullish side. The immediate support for the index is placed around 37300-37000, which coincides with the 50 & 100 DEMA, followed by the 21 DEMA placed near 36400. While on the flip side, the 38000 mark holds to be a sturdy wall and once it is breached on a decisive note, the next set of rally could be seen in the counter.

Nifty Bank Daily Chart

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