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Sensex (59847) / Nifty (17624)

After an extended weekend, our markets started with a small upside gap; however, post the opening, there was no major traction in key indices. The real action was visible outside the index as many individual stocks witnessed mesmerising moves and the undertone remained strongly bullish. With some modest profit booking in the latter half, the Nifty eventually ended around the opening levels with gains of around 0.14%.

The winning streak continued for the sixth consecutive session; however, the traction was missing in key indices. This resulted in formation of a neutral candlestick pattern on the daily chart known as 'Doji'. The said pattern indicates some tentativeness and generally occurs after a sharp run up or decline. In our sense, after the recent sharp rally, any consolidation or intra-week dip should be considered as a healthy development before the next leg of rally. Traders are hence advised to remain upbeat and should consider using any dip as an opportunity to go long. In such a scenario, immediate support is seen at 200SMA placed around 17500 followed by strong support at 17400.

Nifty Bank Outlook (40835)

The BANKNIFTY too opened on a positive note in tandem with our benchmark index. However, similar to Thursday’s session, we could see some tentativeness as it approached the 41000 mark. Around the midsession, it made an attempt to recover; but the banking index failed to sustain at higher levels and gradually descended towards 40700. Eventually, we concluded the day with half a percent cut to the previous close.

The BankNifty has precisely rebounded from the 89-EMA on the weekly time frame and has approached the resistance zone of falling trend line on the daily chart. However, after a sharp rally in such a short span, some profit booking was very much on cards. The higher degree chart structure remains strongly bullish and hence, we should continue with a ‘buy on declines’ strategy. As far as levels are concerned, 40700 - 40500 is to be treated as immediate support zone; whereas on the flipside, 41000 - 41200 - 41400 are to be seen as stiff hurdles.

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