Markets start the week on a positive note, but Nifty needs to clear 9,390 hurdle for further gains

Mumbai: The markets started the week on an optimistic note amid growing hopes of economic activity picking up as the government may possibly relax certain lockdown restrictions after May 3. Global cues were also supportive as markets across Asia traded with a steady positive bias.

The BSE benchmark index, the Sensex, opened with a gap of 330-odd points and managed to sustain above it throughout the day. The index touched a high of 32,104, before settling with a gain of 1.3 per cent at 31,743.

Banking shares led the rally today, with the likes of IndusInd Bank, Axis Bank and Kotak Bank surging 5-6 per cent each. ICICI Bank, Bajaj Finance, Nestle, HCL Technologies, Titan, Bajaj Auto and Hero MotoCorp were the other major gainers among the Sensex 30 constituents. On the flip side, Mahindra & Mahindra and NTPC were the notable losers, down a per cent each.

The broader market also moved in tandem with the benchmark, with the BSE Midcap and the Smallcap indices gaining 1.4 per cent each. However, despite the bullishness mere 27 stocks registered a fresh 52-week high, while 112 stocks touched a new 52-week low in trade today. The overall market breath, too, was kind of neutral, with 1,300 advancing shares for 1,090 declining stocks.

Going into trade on Tuesday, as per the daily Fibonacci charts, in case of further up move the BSE Sensex may face resistance around 32,040-32,130-32,225, while in case of a down move the index may seek support around 31,445-31,355-31,265.

As mentioned in the weekly outlook, the NSE Nifty is currently facing some resistance around the 38.2% retracement level at 9,390. The index today touched a high 9,377 and settled 1.4 per cent higher at 9,282. Failure to sustain at higher levels indicates selling pressure around the resistance zone.

As per the daily charts, the Nifty seems to be moving side-ways between the higher end of the Bollinger Band and the 20-DMA (Daily Moving Average), which are placed at 9,589 and 8,842, respectively.

Among key momentum oscillators, the MACD (Moving Average Convergence Divergence) and the Slow Stochastic are in favour of the bulls, while the 14-day RSI (Relative Strength Index) and the Directional Index are in neutral mode.

Going ahead, the short-term bias for the Nifty may continue to remain positive as long as the index sustains above the 20-DMA, below which as explained in the Weekly Outlook the Nifty may re-visit support levels around 8,670-8,450-8,230.

On the upside, as and when the Nifty clears the 9,390 hurdle, the index may test the higher end of the Bollinger Band around 9,590-odd levels, and then make a dash towards the 50-DMA around 9,980-odd levels.

Disclaimer: The article is for information purpose only and does not advocate any buy or sell recommendation.