By Rohit Srivastava, the founder of indiacharts.com
Where are the Nifty and Bank Nifty headed this week
The key indices are in up trend and likely to continue their advance. A one or two day drop at some point cannot be ruled out but the overall trend should be positive. The weekly RSI has recovered to 54 and is not overbought leaving a lot of room to advance in the coming weeks. We are entering expiry week for April and seasonality remains bullish for April.
Bank Nifty on the other hand has been leading this advance and doing most of the heavy lifting. The breadth should improve with buying shifting to other undervalued sectors. This could end up including sectors like PSUs and Metals and select Midcaps.
Crucial levels to watch in Nifty, Bank Nifty
Nifty faces immediate resistance at 23,870, above which we open up to go to 24,600. Support is trailing at 23,470. Unless we break 23,470 the short term trend remains positive and significant pullback cannot be anticipated.
Bank Nifty has support at 53,140 and could continue higher toward 56,577 as long as the trailing support is not broken.
Strategy for trading Nifty and Bank Nifty this week
The worst is over in March. The April knee jerk reaction has shaken out the weakest hands from the market and also led to a big short built up in many key index stocks. Short covering and fresh buying by institutional investors should continue to support the market.
Investors should add on dips and watch out for sector rotation going forward. Banks are leading the way but we should see more broad based participation from different sectors going forward. So there could be many opportunities on the bullish side.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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