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Sensex (53055) / Nifty (15880)

Nifty started the day on a flat note and consolidated within a range in the first half of the day. However, it gathered momentum in the last couple of hours and ended the day tad below 15900 with gains of less than half a percent.

Since last few weeks, the index has consolidated within a range where the bulls and bears come into action as the index reaches the extreme end of the range. However, since we are trading in an uptrend, the bulls clearly seem to have an upper hand as the declines are getting bought and although the index is within a range, the stock specific action is clearly positive. Now, if we apply ‘’Bollinger Bands’’ on the daily chart, then it is seen that the bands have narrowed significantly and we should soon see a breakout. Given the kind of stock specific momentum and the placement of the Banking index, we expect the market to resume the uptrend soon and could see the index surpassing the 16000 mark in next couple of sessions. On the flipside, the support base is shifting higher and 15800-15750 is now seen as the immediate support range. Hence, traders are advised to trade with a positive bias and look for buying opportunities.

The banking index has shown a relative outperformance in this week so far and other sectors such as Metals, Realty and Midcaps are also gaining momentum. Traders should look to ride the trend in stocks from these sectors which could provide good returns in the short term.

Nifty Daily Chart

Nifty Bank Outlook - (35771)

The BANKNIFTY started the session marginally lower owing to slightly sluggish cues from the global bourses. In the first half, market looked a bit nervous as we saw BankNifty challenging the key support zone of 35450 – 35400. Similar to recent trend, banking stocks gathered some buying strength at lower levels which uplifted the overall sentiments in the market. Although the up move was not that significant, we can see BANKNIFTY closing in the safe terrain by adding over half a percent gains to the tally.

The kind of optimism we witnessed in the previous session, the banking index should have been above 36000 yesterday. But since there was no major follow up seen in banking heavyweights, the move was slightly restricted. Never mind, yesterday’s close is quite encouraging and probably we would see BANKNIFTY heading towards 36000 – 36200 on the weekly expiry. So all eyes would be on a critical level of 35810; because a sustainable move beyond this would trigger strong buying in the banking space. On the lower side, 35400 – 35200 are likely to provide support in the forthcoming session.

Nifty Bank Daily Chart

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