Rohit Srivastava says: “Markets may continue to attempt going higher towards maybe 21,600, 21,700. But we retain some level of caution heading into what is usually a seasonal high in markets around January of each year. Therefore, we would really want to stay slightly light into this rally. And then only use the next pullback as a better entry point.”
Bank Nifty has been the laggard, but I think it should slowly start catching up. 61% retracement of its entire fall would come in at around 44,740, that is going to be the initial hurdle. We will wait to see that being surpassed and then we can probably look at it also testing the highs if it gets past that level.
“If we fail to cross 19,800 and break to around 19,680, it would be a sign that the short-term trend has turned down and we do see further selling and possibly going back to 19,400. Early indications from some of the other indices like Bank Nifty and Smallcap Index show that Nifty will possibly give up and head to those lower levels.”
“You cannot have a market rally without participation from banking. It is worth paying attention to. But it might not be the outperforming sector. The outperformance may still go back to where it was earlier which is in, say, PSU stocks, for example. Banks have generally been the most beaten down part of the market and Kotak has actually been an underperformer. ”
"19,450 is going to be the first hurdle that Nifty is facing. We are pretty close to that and once we get past that, we should head towards 19,700. Even in the Bank Nifty, we are very close to the 40-day average, which is around 43,680. We can go towards 43,800 or slightly higher. "