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Yet again the bulls managed to show their dominance on D-Street by gulping up most of the loss of the previous week during the week gone by. The Nifty index managed to find strength above the previous week’s low of 17,453 and recovered sharply to reach towards lifetime high. The index almost reclaimed the peak of 17,948 and ended the week with a gain of over 2% from the previous week’s close. However, the milestone of 18,000 is yet to be taken out.

Technically, the index might struggle a bit while inching higher due to the placement of a couple of trend lines on the daily scale. The rising trend line formed by joining the lows of 15,513 and 17,326 is placed at 18,000 which is acting as a strong resistance. In addition, another rising trend line formed by joining the highs of 17,793 and 17,948 is placed near 18,200. Thus going ahead, despite the strength in the broader markets the benchmark index would have to push harder to clear the hurdle of 18,000 -18200.

On the contrary, the support has now shifted to 17,450 from 17,350. Only a breach of the same might confirm a short term top in the markets. Till that time bulls are likely to rule the market.

The Nifty Bank once again proved its unreliable price action and underperformed the benchmark indices. The index struggled to clear the hurdle of 38,000 throughout the week. Thus going ahead, only a close above 38,000 might bring in some momentum on the upside. Although the structure remains positive for the index but the intent to move higher is still missing. On the downside, 37000 would be a crucial support for the coming week. A breach of the same might trigger some profit booking in the banking stocks. Conflicting to Nifty Bank index, the Nifty PSU index is on the verge of a major breakout on the weekly scale. A move above Rs 2,580 could result in strong momentum in the PSB space.

Stock recommendations

ITC | Buy | Stop loss: Rs 224 | Target price: Rs 245
After a staggering rally, ITC has given a pullback and as per our broader view, this could a chance for fresh entry. The risk reward to go long looks lucrative at this point in time.

Union Bank | Buy | Stop loss: Rs 36 | Target price: Rs 42
As mentioned above we are bullish on PSU Banks and Union Bank is one of them. One can buy stock above Rs 38. The stock would confirm a breakout from Ichimoku flat line resistance on the daily scale.

(The writer is AVP-Technical Research at Anand Rathi Shares and Stock Brokers. Views expressed are personal)