Markets show signs of rebound as PSU banks surge and Nifty edges upward

By Anand James

Nifty PSU Bank index’s 4% jump on Friday appears to have jump started a recovery in the broad market. The sharp rise in PSU bank index comes after a prolonged sell off that had begun even before Nifty cracked. The PSU banks constituents in the bank nifty has also helped the index get enough elevation that could be considered more than just a dead cat bounce. This encourages us to look for 43,000-43,360 on the Bank nifty index this week, with downside markers placed a tad below 42,600.

Sensex appears similarly positioned as Nifty, having bounced from the 200DMA vicinity. We could look for 64,800 in the coming week, while riding on the Friday’s bounce back, a return below 62,800, the 200 DMA could announce that the bears are regaining control, especially as most oscillators are yet to confirm an upside turnaround yet.

USDINR meanwhile, is enroute its umpteenth attempt to breach the 83.4 mark. Disappointingly tight trading range and lacklustre moves had discouraged upswing attempts and the currency pair had drifted lower earlier, in search of a better launchpad for renewed upmoves. This it found, after slippage towards the 83 mark. The upswing thereof now faces challenges from the 83.3-83.4 marks, before it could embark on an 84.7-85 move.

(Anand James, Chief Market Strategist at Geojit Financial Services. Views expressed are author’s own. Please consult your financial advisor before investing.)