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Sensex (60348) / Nifty (17754)

The US markets reacted negatively to the remark of the FED Chairperson on the rate hikes and taking cues from there the SGX Nifty indicated a weak opening. In line with this, our markets had a gap-down opening however post the initial hiccup there was a gradual bounce back to recover the lost ground. During the fag end there was a strong positive traction that eventually resulted in Nifty ending with gains of 0.24 tad above 17750.

Our markets outperformed as compared to the peers and the initial dip getting bought into augurs well for the bulls. As highlighted in our previous outlook, 17800 – 17850 is a key zone to watch out for as it coincides with a 61.8% retracement level and 89EMA. However, considering the broad-based buying and fag end surge we expect the benchmark to surpass this level and head towards 18000 in the coming sessions. On the flip side, even though the bullish gap left on Monday got filled, it did its job of acting as a support, and going ahead as well we continue to see 17600 – 17570 as strong support. On the weekly expiry day, any dip toward this key level can be considered a buying opportunity.

Nifty Bank Outlook (41577)

Post initial hiccups, the banking index stabilised and traded in a range in the vicinity of 41200 for initial couple of hours. As we progressed, fresh buying emerged around the mid-session to inch higher towards 41600. The BankNifty outperformed the benchmark index and concluded the day tad above 41500 with gains of over half a percent.

The kind of recovery we witnessed was indeed remarkable especially considering Monday’s profit booking and yesterday’s weak start. Technically speaking, the banking index rebounded precisely from the falling trendline support on the daily chart and has also managed to close above the 89 EMA with authority. Going ahead, 42000 remains the next important level to watch out for and any sustainable move beyond same will certainly improve the short to medium term chart structure. On the flip side, 41000- 41200 should now act as a strong demand zone for BankNifty. Considering the above data points, we remain upbeat in this space and would advocate ‘buy on dips’ strategy for same.

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