Market Outlook: Sensex, Nifty continue to trend higher; bias remains positive

@rex_cano

Mumbai: Taking cues from the overseas US market futures, our markets started the day on an optimistic note and went on trade at fresh six-month highs as the day progressed. The BSE benchmark index, the Sensex, opened with a positive gap of 130-odd points at 38,567, and thereafter rallied to a high of 38,895. The Sensex finally ended the day with a gain of 364 points at 38,799.

Financial shares, especially banks led today’s rally. Among the Sensex 30 stocks, Kotak Mahindra Bank surged 3.5 per cent. IndusInd Bank, Bajaj Finance, HDFC Bank, ICICI Bank, Bajaj Finserv, SBI, Maruti Suzuki, HDFC, Bharti Airtel and Axis Bank gained 1-3 per cent each. On the other hand, PowerGrid Corporation declined 2 per cent. Mahindra & Mahindra, Tech Mahindra, and Titan were down around a per cent each.

At today’s high (38,895), the BSE Sensex reached within striking distance of its projected upside target as per the monthly Fibonacci chart at 39,000-level. Break and close above the 39,000-level will open the doors for an upside target of 39,450 and 39,900 in the remainder of the month.

Also Read: Weekly Outlook: Bias remains positive; global cues likely to dictate terms

As per the weekly Fibonacci chart, too, the BSE index seems to have a positive bias as the Sensex has crossed the weekly R1 placed at 38,835. The next target for the BSE index this week would be 38,960 and 39,090. As per the weekly Fibonacci chart, the BSE Sensex now has near support around 38,665 and pivot point will be last week’s close at 38,435.

As per the daily Fibonacci charts, on Tuesday, in case of an up move the BSE Sensex may face resistance around 38,930-38,975-39,015, and in case of a down move, the Sensex is likely to seek support around 38,665-38,625-38,585.

The NSE Nifty ended with a gain of 0.8 per cent at 11,466. Once again, the NSE index tested the higher-end of the Bollinger Band on the daily charts, as the index touched a high of 11,497. The NSE index continues to trend higher albeit in a narrow range between its 20-DMA (Daily Moving Average) and the higher-end of the Bollinger Band, which are currently at 11,240 and 11,505, respectively.

The short-term bias for the Nifty will continue to remain bullish as long as the NSE index sustains above its 20-DMA. On the positive front, the NSE index needs to break and close above the higher-end of the Bollinger Band on the daily charts for fresh upside momentum.

Among the key momentum oscillators on the daily charts, the DI (Directional Index) continues to remain positive. The Slow Stochastic and the MACD (Moving Average Convergence Divergence) are inconclusive. The 14-day RSI (Relative Strength Index) is in the 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.