Market Outlook: Sensex shows promise; Nifty needs to sustain above 11,580, can weaken below 11,500

@rex_cano

Mumbai: The markets exhibited jittery trades till late noon deals and thereafter rallied strongly on the back of fresh buying in Reliance Industries and financial shares. The BSE benchmark index, the Sensex, opened 90-odd points higher at 38,930, but soon slipped into red to a low of 38,765. The late rally saw the BSE index surge to a high of 39,112 – up 346 points from the day’s low. The Sensex finally ended with a gain of 230 points at 39,074.

Among the Sensex 30 stocks, IndusInd Bank zoomed 6 per cent. Reliance Industries, Axis Bank, Kotak Mahindra Bank and Bajaj Auto gained around 2.5 per cent each. HCL Technologies, Infosys, ONGC and SBI were the other notable gainers. On the other hand, Bharti Airtel and UltraTech Cement slipped over 2 per cent each. Asian Paints, Maruti Suzuki, Larsen & Toubro and NTPC were the other prominent losers.

Also Read: Market Outlook: Sensex test 39K, needs to sustain above it for fresh gains

In Wednesday’s trade, the BSE Sensex finally managed to conquer the 39,000-level. Thus, the BSE index can now potentially rally towards its next monthly Fibonacci targets at 39,450 and 39,900, respectively. To add to the positives, the Sensex has also crossed its weekly (R3) placed at 39,090. The bias for the remainder of the week will clearly favour the bulls as long as the Sensex sustains above 38,665.

As per the daily Fibonacci charts, on Thursday, in case of an up move the BSE Sensex may face resistance around 39,200-39,250-39,290, and in case of a down move, the Sensex is likely to seek support around 38,940-38,900-38,860.

The NSE Nifty after its initial tentative behaviour around the 11,500-level, saw a sharp spike in late trades wherein the index touched a high of 11,562 and eventually settled with a gain of 0.7 per cent at 11,550. The only negative factor for the market seems to be that despite advancing in the last three trading sessions, the NSE Nifty has yet failed to close above the higher-end of the Bollinger Band on the daily charts.

In tomorrow’s trading session, the NSE Nifty needs to sustain firmly above 11,580-level, which is the higher-end of the Bollinger Band on the daily charts, for fresh gains to emerge. Tomorrow being the futures & options monthly expiry the markets can be volatile, and in case the NSE index is unable to hold above 11,500-level on the downside, the Nifty can take a sharp dip towards the 20-DMA (Daily Moving Average) around 11,265-level.

Among the key momentum oscillators on the daily charts, the DI (Directional Index) and the Slow Stochastic continue to remain in favour of the bulls. The MACD (Moving Average Convergence Divergence) remains inconclusive and the 14-day RSI (Relative Strength Index) has neared the overbought zone.

Disclaimer: The views expressed in this article are personal and for information purpose only, it does not advocate any buy or sell /recommendation.