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Sensex (51445) / Nifty (15246)

Nifty started the day with a decent gap up well above the 15000 mark. The index then crept higher towards the swing high of 15175. Just when it looked that the Nifty is facing some hurdle towards that swing high and saw some dip, the index heavyweight RIL took the leadership to take out that resistance and then we witnessed a swift upmove in the last hour to end the day around 15250, with gains of over a couple of percent.

Once again, post the recent correction, our markets have managed to show a V-shaped recovery and that is a usual character of a strong bull market. At the start of the week, we were sceptical of the upmove and were reading it as a pullback as both Nifty as well as BankNifty had breached their swing lows.

However, as the chart structure changes, we have to follow the markets and yesterday we saw a change in the structure as the index breached the crucial resistances post the gap up. A continuation of this upmove could lead the Nifty towards its previous highs of 15430 whereas the ‘hourly 20 EMA’ around 15000 would be seen as a crucial support. In last couple of sessions, the banking index was showing some relative underperformance, but it regained the momentum in yesterday’s session (along with other heavyweights) which led the benchmark higher.

The Nifty Midcap index has already been doing well and stocks from the broader markets are providing good trading opportunities. Thus, we continue with our advice to look for stock specific buying opportunities and trade with proper risk management.

Nifty Daily Chart

Nifty Bank Outlook - (36368)

For the third consecutive session this week, the banking index opened higher in tandem with the benchmark. During the remaining part of the session, the BANKNIFTY continued its upward march with a series of higher highs higher lows on intraday chart. In the process, we witnessed a smart rally to conclude the session with over two and half percent gains.

Since last couple of days, the banking space was a bit quiet and did not participate at all in the rally. We were seeing 35600 as an immediate resistance and yesterday at the opening itself, this hurdle got surpassed with an ease. Lot of heavyweight banking stocks had a good catch move yesterday and hence, BANKNIFTY managed to rally beyond the 36000 mark. If we take a glance at the daily chart, the BANKNIFTY has now reached its higher end (36500) of the bearish gap created last Friday.

The Nifty has already crossed this gap area and hence, it would be interesting to see whether the banking index too has a similar sort of strength or not. Beyond 36500, the next levels to watch out for would be 36800 – 37000. On the flipside, 36000 – 35600 are to be seen as intraday supports

Nifty Bank Daily Chart

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