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Sensex (56072) / Nifty (16719)

On Friday, Nifty started with a gap up opening and with the positive momentum for the sixth consecutive session ended reclaiming 16700 mark with gains of about 0.69%.

Last 3 months have been stressful for financial markets across the globe but this week, things have improved drastically on a macro level. In fact, our markets were already showing some resilience in past weeks and it had all the ingredients to move higher. But sulking US bourses were not letting our domestic markets to initiate the relief rally. Finally the much needed impetus was provided throughout the last week which resulted in a smart rally in our markets. If we refer to our recent commentary, last week’s up move has certainly validated our recent bullish stance on the market and the ‘buy on declines’ strategy seem to have worked well in our favor. Now going ahead, Wednesday’s gap area of 16360 – 16490 is to be seen as a sacrosanct support and any decline towards the mentioned support is likely to get bought into. On the higher side, recent swing high of 16793 is very much within a touching distance now and soon we would expect benchmark index surpassing this as well. Slowly but steadily we would see it eyeing its ‘200-SMA’ zone of 16900 – 17050 which would certainly be a sigh of relief for market participants.

In our sense, the index specific move may not be that fascinating now from traders’ point of view and hence its better to stick to stock centric approach in the forthcoming sessions as well. A lot of thematic moves started doing well and hence, the pragmatic approach would be to focus on such potential movers which are likely to provide better trading opportunities. To sum it up, although the undertone remains bullish, it’s important to understand that the low hanging fruit is already gone and hence, its advisable not to become too complacent; rather better to take one step at a time for a while.

Nifty Daily Chart

Nifty Bank Outlook - (36739)

A week full of bullish dominance has been seen in our equity market, wherein the Banking index has shown an outperformance with whopping gains of nearly 6 percent on week-on-week basis. The six straight sessions of positive closure and the sloping trendline breakout have certainly boosted the market sentiments. The NIFTY BANK concluded the week a tad above the 36700 level. On the technical aspect, the banking index has surpassed many milestones of resistance in the prior week to conclude above all its major exponential moving averages on the daily chart. Post such a strong recovery, one should not rule out the scope of profit booking from the higher levels. Though the sentiments have turned in favor of the bulls, wherein any minor correction could be seen as healthy and also as an opportunity to add fresh longs. As far as levels are concerned, 35800-36000 is likely to provide a cushion in the index. While on the flip side, 37000 is expected to act as the immediate hurdle, followed by the unfilled gap of 37400-sub zone in the near period. Meanwhile, it is advisable to stay light on aggressive bets in the index and look for opportunities with a stock-centric approach.

Nifty Bank Daily Chart

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