Sensex regains 38K, expect some consolidation on Friday

@rex_cano

Mumbai: The markets logged smart gains on Thursday on the back of aggressive buying in select financials, technology and metal stocks. Meanwhile, the Reserve Bank of India (RBI) in its bi-monthly policy review kept interest rates unchanged with an accommodative stance. Elsewhere, Asian markets were mixed awaiting fresh cues from the US markets.

The BSE benchmark index, the Sensex, opened with a positive gap of around 270-odd points at 37,947 and thereafter moved in a range-bound manner awaiting outcome from the RBI meet. Post the Central Bank’s announcement, the BSE index firmed up and surged to a high of 38,221 – up almost 560 points from the previous close. Some profit-taking towards the close saw the BSE Sensex pare some gains and settle at 38,025 – up 362 points. 

Among the Sensex 30 stocks, Tata Steel was once again the top gainer, up nearly 4 per cent. Infosys Technologies, Bajaj Finance and HCL Technologies rallied around 2.5 per cent each. TCS, ICICI Bank, Tech Mahindra, ITC, Titan, ONGC, HDFC Bank, Hindustan Unilever and Nestle gained 1-2 per cent each. On the other hand, Mahindra & Mahindra, Bajaj Auto and Bharti Airtel were the notable losers.

The BSE Sensex, on Thursday, crossed the weekly Fibonacci R2 level, placed 38,200. The BSE index is now likely to test the weekly R3 level at 38,340. On Friday, the BSE index may consolidate in a broad range of 37,870-38,340, with a possibility of dip towards 37,600-odd level.

As per the daily Fibonacci charts, on Friday, in case of an up move the BSE Sensex is likely to face resistance around 38,200-38,260-38,310, and in case of a down move, the BSE index may seek support around 37,850-37,790-37,740.

The NSE Nifty for the third straight trading session has managed to trade firmly above its 20-DMA (Daily Moving Average). The near term bias is likely to favour the bulls, as long as the NSE index sustains above 11,015-level, below which the next major support is around 10,850-level – the 200-DMA. On the upside, the Nifty can rally towards 11,400 if global cues are supportive.

Among the key momentum oscillators on the daily charts, the Slow Stochastic has turned positive and the DI (Directional Index) too is in favour of the bulls. However, the MACD (Moving Average Convergence Divergence) is marginally negative, while the 14-day RSI (Relative Strength Index) is 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.