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Sensex (63328) / Nifty (18817)

The SGX Nifty in the morning was indicating a timid opening for our markets, but we started on a flat note and quickly declined during the initial hours, reaching an intraday low of 18660. Similar to the recent trend, the mighty bulls saw this dip as an opportunity and there was a strong rebound, not only recovering the morning losses but eventually closing with a gain of 0.33%, comfortably above 18800.

The day presented a mixed picture, with some weakness in the morning session, but the bulls had the final laugh. In the past four days, the Nifty has followed a pattern of one down day followed by one up day. Therefore, despite the formation of a 'Dark Cloud Cover' on Monday, we believed there wasn't much cause for concern for the bull’s camp. Now considering the momentum and buying in heavyweight stocks yesterday, it is possible to expect the Nifty to reach new highs in the upcoming morning session, and then potentially head towards the psychological level of 19000. Traders are hence advised to remain upbeat and continue the recent strategy of buying during intra-day dips. In terms of support levels, 18550 – 18600 are crucial levels, with yesterday's low around 18660 also serving as a pivotal point.

Nifty Bank Outlook (43766)

The banking index began trading for the day on a tentative note and went on to test the vicinity of 43400. Post some consolidation at the lower levels, the index finally stabilized and gained strength to not only recoup entire losses but also headed in the positive trajectory. The spectacular recovery towards the fag end led closing tad above 43700.

As mentioned in our previous commentaries, it's nearly a month now that the banking index has been vacillating in a range of 43400-44500 and we are awaiting a decisive move beyond this range for a clarity in the upcoming trend. Yesterday, the index tested the lower end of the range, but a V-shaped recovery was seen thereafter, which is indeed an encouraging sign for Bulls. Going ahead, it would be interesting to see the follow-up move in the coming session. The heavyweight banking specifically private names which were in the consolidation phase also attracted fresh buying interest yesterday. For now, 43300- 43400 remains the immediate support zone; whereas on the upside 44000 followed by 44200 are to be treated as hurdles.

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