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Mumbai: The markets romped home with significant gains on the back of positive cues from the global markets and frenzied buying in banking stocks. Bank shares were in demand today amid hopes of a favorable verdict by the Supreme Court on the interest charged for the loan moratorium period matter. The SC in its hearing today said that it will announce its verdict on October 5 after the government sought some more time. Reports added that the government has been in talks with the banks and will be soon filling its affidavit.
Also Read: Decision in 2-3 days over interest on deferred instalments by banks, Centre tells SC
The BSE benchmark index, the Sensex, opened with a positive gap of 270 points at 37,756. The BSE index, thereafter, firmed up as the day progressed with banks leading the way. The Sensex surged to a high of 38,036 and finally ended with a significant gain of 593 points at 37,982. In the process, the BSE index has recovered more than 1,500 points in mere two trading sessions, from its preceding 2,500 points intra-week fall.
Among the Sensex 30 stocks, IndusInd Bank zoomed nearly 8 per cent. Bajaj Finance, Axis Bank, PowerGrid Corporation, ONGC, Sun Pharma, ICICI Bank, Mahindra & Mahindra, NTPC, Maruti Suzuki and Bajaj Finserv rallied 3-6 per cent each. On the other hand, Hindustan Unilever, Infosys and Nestle India were the only losers, down marginally.
As per the monthly Fibonacci chart, the BSE Sensex was expected to bounce back towards 37,950. Now that the BSE index has closed above this level, we may see the pull-back extend towards 38,600-level in the next two trading sessions provided the index sustains above 37,450.
The BSE Sensex has also given a buy indication on the weekly Fibonacci chart. As per the weekly chart, the bias for this week is likely to remain positive as long as the BSE index sustains above 37,400-level. On the upside, the BSE index may attempt a rally towards 38,340-38,640-38,930.
Also Read: Weekly Outlook: Markets precariously poised; Nifty may re-test its 200-DMA
As per the daily Fibonacci chart, on Tuesday, in case of an up move the BSE Sensex may face resistance around 38,170-38,230-38,290. On the other hand, in case of a decline the Sensex may seek support around 37,800-37,740-37,680.
The NSE Nifty galloped another 200 points as the index touched a high of 11,239 in intra-day deals today. The index eventually ended firmly at 11,228 – up 1.6 per cent. The index has bounced back sharply by more than 4 per cent after testing its 200-DMA (Daily Moving Average) last Thursday.
The NSE index is now nearing a precarious situation, as it attempts to move beyond its short-term moving averages i.e. the 20-DMA and 50-DMA placed 11,345 and 11,300, respectively. What makes the rebound a bit complex is that the 20-DMA may slip below its 50-DMA in the coming trading sessions, if the Nifty does not move swiftly beyond 11,350 in the next few trading sessions. It is likely that the NSE index may face some considerable resistance around these two key moving averages.
The key momentum oscillators on the daily chart are indicating a mixed outlook. The DI (Directional Index) and the MACD (Moving Average Convergence Divergence) continue to remain in favour of the bears. The Slow Stochastic, however, has turned positive and 14-day RSI (Relative Strength Index) is back in neutral mode.
Disclaimer: The views expressed in this article are personal and for information purpose only, it does not advocate any buy or sell /recommendation.
