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Sensex (59544) / Nifty (17656)

The Samvat 2079 started on a promising note on the day of Muhurat trading with a bullish gap, which was followed by a minor correction on the consecutive day. The benchmark index witnessed some tentativeness around the 17800 zone ahead of the mid-week holiday; however, the bullish stature remains unchanged with the higher highs formation on the daily chart. The Nifty50 index settled a tad above 17650 levels, with a mere gain of 0.46 percent in the current truncated week.

On a technical aspect, the index is firmly placed above all the major exponential moving averages on the daily chart and has maintained its cycle of higher highs – higher lows, construing to have a bullish setup. However, ahead of the monthly expiry, Nifty has seen some tentativeness at higher levels; but we do not construe this as any sign of worry. Traders are just opting to take some money off the table after seeing a decent up move in the last two weeks. As far as levels are concerned,17600-17560 is likely to cushion any fall on an immediate basis; whereas on the flipside, a decisive breach over the immediate resistance of 17800 (which we expect soon) could trigger a strong rally towards 18000 and beyond.

Nifty Bank Outlook (41123)

The BANKNIFTY opened higher in tandem with benchmark index on Tuesday. However, the profit booking took place almost from the initial trades. Due to some extended decline in the latter half, the banking index not only pared down losses but also went on to close in the negative terrain by shedding near half a percent from previous close.

Honestly speaking, it was surprising to see banking space failing to capitalise on the initial lead. Although, purely from technical observations, we can see Tuesday’s candle overshadowing previous candle, which in general is a sign of caution. But there are times, practically we shouldn’t be going with such theories. Considering the inherent strength of our markets and the improved sentiments globally, we expect market to resume upward momentum. We reiterate that it’s a matter of time BANKNIFTY will surpass its previous highs to enter the uncharted territory. Before this, 41500 - 41650 are the immediate levels to watch out for. As far as support is concerned, 41000 followed by 40600 are to be treated as key levels.

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