Expect new highs on Nifty once 8892 is crossed: Bose

Below is the transcript of the interview

Latha: We saw that spirited rally in the Bank Nifty yesterday, 2.5 percent on that index after being sleepy and sluggish for a goodish bit. So, how do you trade the Bank Nifty and how do you trade the Nifty today?

A: The Bank Nifty is showing real strength. I would say that after three days of pause, three consecutive lower closes on the Bank Nifty since Monday up to Wednesday, yesterday was a welcome rally. It was a rally that is typically characteristic of Bank Nifty when it is in a real bullish mode. 460 points, 2.5 percent added to the previous day’s close, it is looking good.

Some of them like Kotak Mahindra Bank and all are leading the charge right at the front. In fact, some of the private sector names like HDFC Bank, even State Bank of India (SBI) for that matter looked pretty good. So, banks are back in action. That is the kind of message that we are getting.

Poor fellows like us, the analysts, we had been lamenting that without Bank Nifty really participating how can this rally in the Nifty continue? Finally we have got that rally that we were expecting for so long. At least in the first three days it was really a matter of concern.

Now, I would say that both public sector banks as well as private sector banks, of course, private sector banks would continue to garner more interest led by Kotak Mahindra Bank. So, you can play long on Bank Nifty as well as there are stocks. In fact one of the most heartening feature of this rally is that the participation of a major stock that has been on a downtrend for quite sometime that is Reliance Industries.

Overall we are looking at testing of 8,800 plus levels especially the zone between 8,849 and 8,892 on the upside. Unless 8,750 is decisively broken on the downside, I don't think bulls would have any obstacle as such to push things forward. However, we are entering into a major resistance zone. It would be worth a while to watch how things pan out.

My concern has been that yesterday Put writers had not shown that kind of enthusiasm that they were displaying on the first three days of this week. While the calls have covered but there had been substantial number of calls to be precise 7,01,000 more units have been added between 8,900 strikes and about 9,000 strikes.

At higher levels expect some profit booking. However, bears are more to worry rather than the bulls, they are charging ahead.

Latha: The resistance will kick in at?

A: Resistance initially will 8,782 to about 8,810 is the resistance zone that is the first resistance zone, quite strong at that and the major resistance zone would be between 8,849 and 8,892. 8,892 once crossed at least I would be expecting fresh new high on the Nifty. However, this zone between 8,782 and 8,892 is a major resistance zone as such.

Latha: For the Bank Nifty any levels?

A: Bank Nifty yesterday did show good amount of movement on the upside and now quite close by I would say 18,990 to about 19,050 would be a strong resistance level. Beyond that it would be 19,150 to about 19,300 kind of area that would bring in some supply. So, we need to watch out for these levels.

Bank Nifty is especially poised to take things forward. Support that we need to look for Bank Nifty are placed around 18,664 to about 18,550. The critical level for Bank Nifty to maintain would be 18,785. Above it, Bank Nifty will continue to display major strength; below it some strength would diminish.

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