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Sensex (51349) / Nifty (15116)

The positive global sentiment aided to a gap up opening for the week and the Nifty continued to march higher to end the first day of the week above the 15100 mark. The bulls continue to dominate the market movement as we had another gap up opening yesterday to surpass the 15000 mark with an ease.

Post the budget, it was the sixth straight session of gains and this vertical upmove has certainly overwhelmed traders with good returns. Yesterday, the banking index initially took the charge but as the day progressed, we witnessed some sector rotation with other sectors such as Auto, IT and Metals gaining momentum in the later half.

There’s no second thought about the trend for the market which continues to be up, but stock/sector specific approach is now providing good opportunities for traders. Hence, traders are advised to continue with a positive approach and look for stock specific opportunities. As far as levels are concerned, the 20 EMA on the hourly chart at 14970 is the support and till this is intact, one should look for buying opportunities on dips. On the flipside, 15200 followed by 15300 are the important levels to watch out for.

Nifty Daily Chart

Nifty Bank Outlook - (35984)

The global optimism yesterday morning led to a head start for the new trading week. The Banking index opened with a good bump up beyond the 36000 mark. In fact, in the initial trade, the lead extended and it marched towards it’s Friday’s record high. However, traders chose to take some money off the table and during the remaining part, we witnessed a consolidation in all key indices.

The BANKNIFTY pared down some portion of gains but managed to conclude by adding another percent to the previous close. Yesterday at the beginning, we witnessed a good traction in almost all constituents.

But as the day progressed, the enthusiasm seems to have faded a bit and hence, the BANKNIFTY didn’t have enough strength to go beyond Friday’s high of 36640. In our previous commentary, we had highlighted the ‘Gravestone Doji’ pattern formed on the dally chart. Yesterday’s range was contained to Friday’s candle and the pattern still remains valid.

Thus, we continue to advise caution (especially in banking space) as long as 36640 is not surpassed convincingly. If any weakness has to trigger, it is possible after the activation of the mentioned pattern i.e. below 35500. Traders are advised to take a note of all these key levels and should position themselves accordingly.

Nifty Bank Daily Chart

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