The benchmark indices ended on a strong note before the Union Budget on Monday. The Sensex surged 255 points or 1.74%, to settle at 14,913, after seeing an intraday high of 14,945 and low of 14,499. The Nifty closed at 4,424 up 1.73% or 75 points, after witnessing a day's high/low of 4434 and 4298. Among other stock indicators, the BSE small cap index ended 0.4 % higher while the CNX mid cap index rose 0.7 %. Buying was across the board, financial, infrastructure, pharma and select oil & gas stocks led today’s gain. Markets this week, Sensex and Nifty were up 1% respectively.

The trend is weak but nifty has managed to sustain to close above its first resistance point of 4380 and ended on a strong note. On Monday 6th July we have the budget and players are very skeptical to take any fresh position ahead of a big event.

There is lot of selling pressure at higher levels in the index pivotal like Reliance, Bhel which is keeping the momentum down. Markets are trading at a very crucial level from where the nifty can rally 8% on either side taking cues from the budget. We believe that one should wait for the clear trend to emerge and then look for a great buy. If nifty manages to trade above 4440 then one should stay long with a stop?loss of 4350.

For tomorrow support for nifty is at 4350 & 4270 and a trade below this level could bring severe selling pressure into the system. On the higher side if 4520 level is taken out then markets might rally higher. Ultimate target on the higher side could be close to 4730 and on the lower 4270 should act as a strong support point. Sectorally banking, power and infrastructure stocks look very attractive and strong at these current levels.

Nifty Future Daily chart: (4424) – The trend still remains cautious as nifty future is still trading below some important resistance point of 4450?4550. Unless nifty break and sustains above 4550 fresh buying should be avoided. On an intra?day basis 4375?4340 should act as a strong support area.