The benchmark indices ended at 15-month highs—their highest closings since June 2, 2008. The Sensex touched a new 2009 high of 16,035.50, before closing at 16,016 up 327 points or 2.09%. While the Nifty advanced 102 points to finish at 4,782 after seeing a high of 4,790. The broader indices outperformed the benchmark indices, up 2.3-2.8%. Buying was across the board and all the sectoral indices ended in green barring FMCG. The BSE Realty Index shot up 5.5%. Metal and Bank indices gained 3-3.5%. Auto indices went up over 2.3%. The Sept nifty future ended with 21 points premium.

The Nifty was trading in the range of 4550-4730 for quite some time and today it broke-out from the trading band and closed on a strong note. This is the first successful higher closing for the market and going forward one has to see if markets manage to sustain above the 4,790/16,000 mark for a larger breakout.

Markets have just closed near to their 61.8% retracement area of 4790/16035 which is a very important point as per the Fibonacci move. Going forward it would be very necessary to see if markets manage to stay above these levels to enter into a new zone. We would still advice players to be very selective and cautious in buying stocks at higher levels. We have observed that this rally has not been participated by the major index pivotal stocks and we need strong confirmation from the leaders that this rally is going to sustain at higher levels.

For tomorrow support for nifty is at 4710?4680, traders can take a chance of buying nifty at lower levels and hold with a strict stop?loss of 4615?4580. Once nifty sustains above 4790 then target in the near term is 4870?4910.

Today banking stocks have shown a strong comeback and going forward it seems that they could take the leadership.

STOCK IDEA:

1) ADITYA BIRLA NUVO (1018) – Buy and hold with a stop?loss of 980, counter showing strong sign of revival, resistance at 1040 if maintains above then short term target looks 1095?1150.

2) BANK NIFTY (7674) – Buy, the index has been consolidating for quite some time above the 7300 mark and today is confirming strong momentum going ahead. The target seem like 7830?7950 and if maintains above 7950 then 8300. Support exits in the region of 7500?7300.

3) EKC (201) – Buy and hold with a stop?loss of 180 for a longer duration. The stock has been consolidating for a while and now is ready for a major rally. Short term target looks 225?260.

4) HINDALCO (108) – The stock is in the edge of giving a trend?line breakout above 109, if maintains above then buy and look for a target of 116?122.