By Ajit Mishra
Markets have been maintaining a positive tone for the last one and a half months and now trading just 4% away from their record high. Apart from the recovery in the global indices, renewed buying in banking, financials, auto and FMCG majors combined with a noticeable recovery in the broader indices has strengthened the rebound. Consequently, Nifty managed to surpass the hurdle at 18,100 and currently trading closer to 18,400 and Sensex also crossed 62,000 levels. Among the broader indices, the midcap index is showing relatively higher strength and trading on the verge of making a new high while the smallcap index is still trading down nearly 19% from its record levels.
As we’re inching towards the record high, traders should plan their positions accordingly and use dips to the support zone in the Nifty to add quality stocks. The same holds for the banking index, which is among the top performing sector, at present. Along with the key levels for indices, we have highlighted a list of stocks across the sectors, looking strong positionally alongside a few weak structures too.
Nifty Outlook (CMP: 18,398.85)
Nifty has formed a higher base around 18,050 so we recommend continuing with the positive bias till it upholds this level. In case of a dip below that mark, the profit taking may extend to 17,850. On the higher side, we are eyeing the index to test the 18,500-18,700 zone.
Bank Nifty Outlook (CMP: 44,072.10)
The banking index has surpassed the key hurdle at 43,500 now and we’re now eyeing a new record high. We feel the private banking counters would continue to outshine the PSU pack so traders should plan their positions accordingly. In the case of profit taking, the 42,600-43,100 zone would act as a strong support for Bank Nifty.
Stocks to Watch
Bullish – Ashok Leyland, Axis Bank, Bharti Airtel, Birla Soft, Delta Corp, Intellect
Bearish – Dixon, Hindalco, Sun Pharma, UPL
(Ajit Mishra, VP- Technical Research, Religare Broking. Views expressed are author’s own. Please consult your financial advisor before investing.)