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Below The Weekly Note by Mr. Ajit Mishra, SVP - Technical Research, Religare Broking Ltd.

Markets extended their bullish tone for the third successive week and gained over a percent. The beginning was downbeat but the bias changed in the following sessions with a surge in the US markets. Consequently, both the benchmark indices, Nifty and Sensex, settled firm at 19,731.80 and 65,794.73 respectively. All key sectors, barring banking, participated in the move and posted strong gains wherein IT, realty and auto were the top gainers. The broader indices maintained their buoyancy and the midcap index also reclaimed its record high after two months

Global cues are largely dictating the trend and we expect this trend to continue in the coming week as well. Among all the major indices, the US markets are showing noticeable strength and have recovered considerably in the last three weeks. The Dow Jones Industrial Average (DJIA) may take a breather after the recent upmove however we expect the tone to remain bullish.  The next major hurdle would be at the previous swing high i.e. 35,679  and any dip in 34,300-34,600 zon would attract buying interest.

On the domestic front, we may see some consolidation in Nifty after testing 19,850 however the bias would remain positive. A decisive breakout above that level would help the index to inch toward the record high i.e. 20,222 levels. On the downside, the 19,300-19,500 zone would offer a cushion in case of any dip. Amid all, the underperformance of the banking pack may continue to weigh on the sentiment however buoyancy in other sectors would continue to offer buying opportunities. Besides, traders can selectively look for long trades from the midcap and smallcap pack too.

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