A volatile week ended with a minor loss where midcap index outperformed this week and it may continue to outperform in the coming days ahead of the union budget. PSU banks are showing strength ahead of PSU Bankers meeting with FM before the budget and RBI will come up with a second round of “Operation twist” on Monday which is also supporting the move in PSU banks. They may continue to do well as valuation are attractive, the NPA cycle has picked out and the resolution process has become faster. Other than PSU Banks, the metal sector is shining because of easing US-China trade tension and strong economic data from the US where they may continue to shine amid a strong global market.
There will be no major global cues amid New year holiday mood while on the domestic front, monthly auto sales numbers will be an important trigger for the market next week.
Technically, the texture of one step backward, two steps forward is still intact where 20-DMA of 12083 is strong support. Generally high and low of the first day of new expiry become sacrosanct levels means low of 12157 will act as an immediate support while; above high of 12258, Nifty may get further momentum to head towards 12350/12500 levels. In Friday’s trading session, heavy put writing was visible at 12200 strike price means bulls are betting on the upside with 12200 as a base for the next week. Banknifty is the leader of this bull run and it is likely to continue with its leadership where it may head towards 33000/33500levels in the coming days while 20-DMA of 31900 is major support in the downside.