Nifty has resistance at 18,604 levels

Nifty Ends on a positive note ending a 5-day losing streak as buying was seen at lower levels. The Niftybank remained muted forming an Inside day. It was an opportune dip for the momentum traders as Nifty was down for 5 consecutive sessions. As previously shared, the levels of 17,950 – 18,000 were of crucial importance for the short term to midterm. The buying was seen across the board with all sectors adding gains barring Telecommunications. The momentum was seen in Oil & Gas, Financials, Basic Resources and Metals adding the most.

It was classic support played out with 20 SMA and previous top providing the much-needed support. We believe this marks an important low for Nifty at 17,950 – 17,960 levels for the short term and should hold as a way forward for momentum traders.

On the higher side, Nifty has resistance now placed at 18,604 levels which is its all-time high. The Niftybank which was outperforming was seen contracting and was under an overdue cool off after a recent expansion in prices. Support for Nifty bank is at 40,700 – 40,200 for the short term.

We believe despite an uptrend, strength is seen in select stocks from Financials, IT and Energy. ICICI, Axis, SBIN and are top picks in the banking space while TechM and JSW Steel are also looking attractive at current levels.

(The author is Technical Analyst, Finversify)