Nifty Bank has seen sharp short covering after under performing in the month of December. Prior to December it had out-performed ..So during this Rock-n-Roll one level which acted a pivot was 19068 as marked horizontal in the graph over which Bull’s will get control over the markets.
So as we could all mark that since last July, 19068 level has played role of resistance-Support and now we are again approaching the same. But this time its more crucial resistance because we also have 100 day SMA at the same level. From the Derivative markets also we have got highest open interest at 19000 mark which may be a small resistance. Even a dragon fly Doji on daily chart suggest that bulls got back control at the end of the day. Even indicators are showing strong positive momentum which is giving me more confidence of probable breakout over 19068.
Now getting to Wave Theory, we have started a Wave B corrective move against a larger corrective Wave. Looking at a primary level, i conclude that we may get a Flat formation to larger wave which means this rally has all chances to kiss 20000 mark soon. Even post 19000 we have all resistances around 20000 which means 70 points move away from close today would trigger fresh buys for traders. Investors should still remain stock specific in Bank Sector as still many PSU’s are announcing willful defaulter which may have strong impact on profits in coming quarters. So Strategy would be simple to go long on Nifty bank with Stop loss of 18600 targets 19450/19960.