Nifty Strategy for 17th July | Positive Momentum Continues, Digital Sector Shines

Benchmark indices witnessed sustained positive momentum in the previous week, with the Nifty closing up 1.3% and the Sensex gaining 780 points.

Notably, the IT and Digital indices emerged as the top gainers, rallying over 4%. PSU bank stocks, however, faced profit-booking, resulting in a decline of around 1.5% in the PSU Bank index.

Today, the Sensex is currently trading up by 210 points or 0.3%, while the Nifty is trading at 19,629 levels - up 65 points or 0.3%.

Among stocks, Wipro and Tech Mahindra are the top gainers from the Sensex, while Titan and Tata Motors are the top losers.

Here’s a rundown of expected market movements…

Nifty Analysis:

The Nifty index successfully crossed the short-term resistance of 19,500 on last Friday, marking a significant positive development. The index closed above this resistance level, which is largely favorable.

On the daily and weekly charts, a bullish candle formation has been observed, along with a breakout formation on the intraday chart, further supporting the prevailing trend.

For the day, trend-following traders should keep an eye on the turning point at 19400, as a move above that could drive the market towards 19700 - 19800.

On the other hand, a break below 19400 may lead traders to consider exiting long positions. In such a scenario, a quick correction towards 19350 - 19300 can be expected.

Trading Strategy for Nifty:

To capitalize on potential opportunities, consider buying Nifty if it corrects to the levels of 19530 and 19500, while setting a stop loss at 19400.

Bank Nifty Analysis:

The 20-day SMA (Simple Moving Average) or 44500 level holds crucial significance as a trendline level for the Bank Nifty.

A move above 44500 could potentially trigger a retest of the levels at 45250-45600. Conversely, if the Bank Nifty falls below 44500, it may slip towards the 50-day SMA or 44000.

Nifty IT Index:

The Nifty IT index has formed a bullish breakout formation by crossing the level of 30000.

This breakout suggests targets of 31500 and 33000. Consider buying on dips, with support levels at 30500 and 30200.

The overall market sentiment remains positive, with sustained momentum observed in the benchmark indices.

The IT sector continues to shine, while PSU bank stocks face profit-booking.

Traders should closely monitor the key levels mentioned and employ suitable strategies to capitalise on potential opportunities.

See you tomorrow!

Kotak Securities

Disclaimer: The information provided in this article is based on technical analysis and does not constitute financial advice. Traders should exercise their own judgement and consult with financial professionals before making any investment decisions.