Technical & Derivatives Report
During the week gone by, the benchmark index witnessed
lethargic move in the first three sessions with some profit booking.
Subsequently, the market then exhibited remarkable recovery on
Thursday with the Nifty ending just below the recently marked all-
time high levels (12293.90). The stage was all set on Friday for a
gap up opening and extending the optimism however the fresh
geopolitical tensions spooked the sentiment resulting in a weak
start on Friday. The Index then crept lower throughout the day
and ended with a loss of around half a percent at 12227 and
almost flat on a weekly basis.
After the sharp rally seen in the initial December month from the
recent lows of 11832, the prices have now slipped into a
consolidation phase for the last three weeks in a range of 12100-
12300. The daily chart depicts this price structure as a formation
of a Bullish Flag pattern. Now as per the pattern, the next
momentum move can trigger only above 12300 which can then
open doors towards 12400-12500 levels. However, till then the
prices may continue to remain in range 12100-12300 with the
lower side of the range at 12100 to act as sacrosanct support.
The bias remains positive and hence traders are advised to avoid
contra bets and maintain a positive stance.
Support 1 – 12180 Resistance 1 – 12300
Support 2 – 12100 Resistance 2 – 12330
Exhibit 1: Nifty Daily Chart
Bank Nifty Index too started on a weak note on Friday and
slide lower throughout the session to end with a loss of around
a percent at 32069.
For the last few weeks, the bank nifty has entered into time-
wise correction within 31850 - 32600 range. Technically, not
much has changed and the next momentum move can only be
seen on a range break from the mentioned levels. The primary
uptrend remains intact and hence traders are advised to
continue with stock-specific approach from the banking space
which are likely to give better trending moves.
Support 1 – 32000 Resistance 1 – 32330
Support 2 – 31850 Resistance 2 – 32480
Exhibit 2: Nifty Bank Daily Chart
The key highlight of the week was the strong outperformance by
the midcap basket as compared to the benchmark index. The
stocks from the midcap space witnessed stupendous rally and
moved intraday 5-7% with ease. This is totally in line with what
we have been saying since the last couple of weeks and at this
juncture, with the visibility of ‘Inverse Head and Shoulder’
pattern breakout in the midcap index, the outperformance is
likely to continue in the near term. It seems like a payback time
from the Midcap counters which have been underperforming as
compared to front line counters for the past more than 2.5 years
and hence, we echo our stance that traders should continue with
the stock specific long approach in the midcap space.