Mumbai: The markets today extended gains on the back of follow-up buying in select index heavyweights. The mood was bullish right from the onset as global cues too were supportive. The BSE benchmark index, the Sensex, ended near its days high for the second straight day. The Sensex today gained 595 points at 32,201, after having touched a high of 32,267.
Among the Sensex 30 stocks, Larsen & Toubro and Hero MotoCorp soared around 6 per cent each. IndusInd Bank, HDFC Bank, Maruti and HDFC jumped 3-5 per cent each, while Tata Steel, ICICI Bank, HCL Technologies, UltraTech Cement and Sun Pharma were up around 2 per cent each. ITC was the sole notable loser down nearly a per cent.
The Sensex came within striking distance of its upside target mentioned yesterday around 32,310-odd level. In case, the BSE index is able to break above 32,310, then it’s next logical upside target could be this month’s high around 32,850-odd level. On the flip side, in case the market corrects, the BSE index is expected to seek strong support around 31,465-odd level.
As per the daily Fibonacci charts, in case of an upside the BSE Sensex may face resistance around 32,440-32,515-32,590, and in case of a down move, the BSE index may seek support around 31,960-31,890-31,815.
In a matter of mere two trading sessions, the NSE Nifty has reclaimed the 9,500-level, and interestingly this is where the Nifty had started the month after a significant gap down opening. In a way, the index has recouped most of its monthly losses. As per the monthly charts, the NSE index may attempt to break above the April month high in the short-to-medium term, which is around 9,900-odd level.
On the daily charts, the NSE Nifty has ended above its 20-DMA (Daily Moving Average) for the second straight day, which is a positive sign. As per the daily charts, the Nifty seems on course to test the higher end of the daily Bollinger Band, which gives us a target of around 9,700-odd level. The question is that will the up move sustain? As of now, the up move seems susceptible to profit-taking due to lack of strength as indicated by the ADX index.
The ADX index has been tepid since the second week of May, thus we have seen sharp moves on either sides with neither been sustainable. Currently, the ADX index highlights lack of strength in any directional move. Till such time, the ADX index shows strength, we may see the NSE index swing in a broad trading range of 8,800-9,700.
Among the other key momentum oscillators, the Slow Stochastic and the DI (Directional Index) remain in favour the bulls. The MACD (Moving Average Convergence Divergence) and the 14-day RSI (Relative Strength Index) are inconclusive.
Disclaimer: The article is for information purpose only and does not advocate any buy or sell /recommendation.
