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Sensex (56858) / Nifty (16930)

US Fed chairman did not shock the markets this time as they announced a rate hike of 75 bps which was very much in line with expectations. In fact, the dovish commentary lifted the overall sentiments in US markets, which had a favorable rub off effect in our markets at the opening yesterday. We started the session with a decent bump up above the 16750 mark, which kept on accelerating as the day progressed. Eventually, the benchmark index Nifty managed to close at 3-month high by adding more than 1.70% to the previous close.

Our market had shown a glimpse of some strength during Wednesday’s session and with global market boost, we managed to extend the move beyond the 16900 mark. With yesterday’s strong rally, 17000 is very much in sight now which is also closer to the ‘200-SMA’ level of 17030. Most likely, we would see index hastening towards this junction in the coming session as well and then we’ll have to see whether market participants opts to take some money there or they continue to move towards 17200. In our sense, the bias remains strongly bullish and any decline towards 16830 – 16750 should be used to go long. However having said that, it’s advisable not to get too complacent at this juncture and hence, one needs to follow one step at a time strategy.

Apart from this, we witnessed a good broad based participation in last couple of days and hence, one should keep focusing on such potential candidates who are likely to outperform the key indices going forward.

Nifty Daily Chart

Nifty Bank Outlook - (37378)

Bank Nifty as well started the expiry session with a huge gap up opening, and with positive momentum throughout the day ended with gains of over 1.50% at 37378

The bank nifty has witnessed a remarkable run for the July series as it rallied more than 11% and has been the charioteer of the recent up move. During this run, bulls broke above crucial resistance one by one and are now placed in a very strong position. With a day to go for the weekly candle to complete, prices have already broken above a trend line resistance formed by joining all-time high to the recent lower tops; confirmation of this breakout can fuel a rally in August month as well. Having said that, traders are advised not to be complacent and keep booking timely profits as the oscillators have entered the overbought zone and inbetween bouts of profit booking cannot be ruled out. The ideal strategy would be to have a stock-specific approach and for index-specific trades, they should prefer dips to add longs. As far as levels are concerned, immediate support is placed at 37000 - 36800 levels whereas resistance is at 37500 - 38000 levels.

Nifty Bank Daily Chart

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