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Sensex (57570) / Nifty (17158)

Quite similar to the previous session, the benchmark started with a gap up opening, there were few attempts of intraday dips however the undertone remained bullish to end at the highest point gaining another 1.35% to reclaim 17150 with ease.

The action packed week concluded on a strong note and importantly above the psychological mark of 17000 with some authority. This level coincides with the ‘200-SMA’ and hence, should be considered as a key development from a technical point of view. Also with this, we are now trading at 3-month high which is an encouraging sign for the bulls. It has been a trend deciding week for our market and since we have concluded the July month as well, we are left with lot of promise for the August month. In last couple of sessions, we witnessed back to back gaps which can be termed as ‘Breakaway Gap and ‘Runaway Gap’, respectively. This is a sign of a strong momentum and hence, till the time we do not see Friday’s gap area of 17018 – 16948 being challenged or filled, we may not see a loss of momentum soon. Just to elaborate, here the loss of momentum stands for overall buzz we are seeing in individual pockets and not the actual benchmark index. As far as Nifty is concerned, we may see some consolidation going ahead, but undertone in the broader market would continue to remain strong. For this week, 17380 followed by 17450 are the immediate levels to watch out for.

Nifty Daily Chart

Nifty Bank Outlook - (37491)

On Friday, Bank NIfty as well started with a gap-up opening however follow-up buying was missing resulting in a profit booking that not only erased morning gains but also dragged lower to mark an intraday low of 37221. Subsequently, In the mid-session, there was a gradual recovery to regain the positive terrain and eventually end with gains of 0.30% tad below 37500 levels.

In our previous outlook, we did mention price breaking above the crucial trend line on the weekly chart and the said has been confirmed by completing a 'Descending Triangle' pattern. With this, the bulls are in a comfortable position to ride further northward in the near term. However, after being a charioteer for the major part of the recent rally, the bank index took a back seat on Friday, and oscillators being in the overbought zone going ahead as well we may see in between price or time-wise correction. As the undertone remains bullish such corrections should be taken as buying opportunities as July month has put the stepping stone for a continued uptrend in the near term. As far as levels are concerned, 37000 - 36800 is immediate support whereas resistance is seen at 38000 - 38300.

Nifty Bank Weekly Chart

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