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Sensex (53161) / Nifty (15832)

We had a splendid start to the week as global markets looked jubilant in the absence of any unfavorable development. After opening around 15900, markets failed to keep up the same momentum throughout the session. In fact towards the latter part of the session, the Nifty came off a bit and eventually ended almost at the lowest point of the day. Despite this, the benchmark index managed to close above the 15800 mark by adding more than eight tenths of a percent gains.

It was really disappointing to see market failing to capitalize on the head start they got yesterday morning. Ideally a close beyond 15900 – 16000 would have created a state of confusion among the bears. But it seems they managed to hold their nerves and did not let Nifty surpass the sturdy wall. On the other hand, Nifty closing beyond 15800 itself is a big takeaway for bullish participants. Hence the coming session would turn out to be the decisive one and it would be interesting see to who manages to claim their dominance. As far as supports are concerned, 15800 – 15700 are to be seen as key levels; whereas on the flipside, it’s a daunting task to overcome the cluster of resistance around 15900 – 16000.

Traders are ideally advised to wait for decisive breakout on either side to create aggressive bets, till then it’s better to stick to a stock centric approach. During the first half yesterday, we observed lot of thematic ideas doing well but towards the end, the momentum faded away in most of them. Let’s see how things pan out in the coming session.

Nifty Daily Chart

Nifty Bank Outlook - (33811)

The bank nifty as well started the week on a strong note, opening well above the 34100 mark however there was no follow-up buying post the gap up opening. As a result, some profit booking at higher levels pulled the bank index lower to erase a major part of morning gains. There was no major traction and the Bank Nifty eventually ended with gains of 0.55% tad above 33800 levels.

Despite a strong opening, there was a lack of enthusiasm on the Index front and this was mainly due to the bank nifty entering the zone of the bearish gap left a couple of weeks back. Even though a major part of this gap has been filled, as long we don't fill the entire gap (Bank Nifty 34346) some tentativeness will remain at higher levels. Now if we observe the placement of RSI Smoothened then we can see a fresh buy signal that augurs well for the bulls however traders are still advised to avoid aggressive bets as long we don't see a decisive breakout beyond the 34400 - 34500 zone. On the flip side, 33600 - 33400 is seen as immediate support.

Nifty Bank Daily Chart

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