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Sensex (54395) / Nifty (16216)

Trading for the week started on a sluggish note as indicated by the nervous global cues. The benchmark index opened slightly above 16100 as indicated by the SGX Nifty early in the morning. Technically, this soft opening in our market was mainly triggered by the overall weakness in IT counters; courtesy to disappointing Q1 numbers from giant TCS. However, the same was compensated by other heavyweight pocket, banking. They provided the much needed cushion at lower levels and as a result, the Nifty managed to recover throughout the remaining part of the session to conclude almost at Friday’s close.

Key indices have now slipped into a consolidation mode and hence, ideally one should now keep focusing on thematic moves / broader markets, which are likely to provide decent trading opportunities. As far as Nifty is concerned, 16100 – 16000 has now become immediate support zone; whereas on the flipside, slowly and gradually we can see the extension of the rally towards 16350 – 16430. We reiterate globally things have not completely changed yet and hence, it’s better not get complacent till the time we do not surpass some key levels.

Meanwhile, the apt strategy for index traders would be to buy as close as possible to support levels by following strict stop losses and look to lighten up around the higher end. There would be lot of sectoral churn during this time and hence, one must meticulously keep a close tab on these developments now.

Nifty Daily Chart

Nifty Bank Outlook - (35470)

Bank Nifty as well started with a gap-down opening however it witnessed an open low kind of scenario where right from the word go it started moving higher. As the day progressed the momentum increased not only to recover morning lost ground but to end with gains of around a percent at 35470.

During the previous bounce back, the bank nifty witnessed a stiff hurdle around the 89EMA, and on Friday we had a tentative close around it. This time however the bulls have a strong upper hand as the key average has been crossed convincingly and yesterday we saw an outperformance by this sector. Now with prices above key averages and retracement levels, it seems that prices are headed for their next resistance levels placed around the previous swing high around the 36000 and then towards the 200SMA at 36500. Traders are hence advised to keep a positive bias and use any dips to go long. As far as levels are concerned, immediate support is at 35100 - 34900.

Nifty Bank Daily Chart

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