Technical & Derivatives Report
On the RBI policy day, Bank Nifty started on a positive note and
after witnessing choppy moves on both sides of the trend ended
near the opening levels with gains of 0.62% at 21642.60.
On the daily chart, Bank Nifty failed to cross its previous session
high at 21936 and ended up forming a 'Doji' pattern. The said
pattern suggests uncertainty amongst market participants due to
the lack of a clear trend. For the coming session, Bank Nifty will
need to surpass the matching high around 21936 for the next
momentum upmove whereas, on the flip side, immediate support
is placed around 21370 followed by crucial support at 21000
levels. We advised traders to be agile in-stock selection from this
sector and have a proper exit setup.
Support 1 – 21370 Resistance 1 – 21936
Support 2 – 21000 Resistance 2 – 22000
Exhibit 1: Nifty Daily Chart
Sensex (38025) / Nifty (11200)
We had a gap up opening yesterday citing favorable cues from the
global peers. Subsequently, the market slipped into a consolidation
mode ahead of the RBI Monetary policy. The RBI eventually
maintained its status quo and since there was no negative
announcement, markets took it positively. Around the mid-session,
strong buying emerged across the broader market and in the
process, the Nifty went on to surpass the 11250 mark. However,
once Nifty approached the sturdy wall of 11300, the bulls chose to
take money off the table and due to weekly expiry, the volatility
increased thereafter. Within no time, markets were significantly off
highs. Fortunately, the selling got absorbed and the Nifty ended the
weekly expiry precisely at 11200.
Technically speaking, the benchmark is still trapped in a range and
till the time we do not see a decisive breakout outside the range of
11350-10880, we are likely to see such wild swings in-between.
Before this, immediate resistance is at 11260 and the supports are
placed at 11127-11064. But there is some encouraging takeaway of
this price action, which is the outperformance of individual themes.
We are witnessing some excellent moves in individual stocks and
that is keeping the traders’ fraternity engrossed all the time.
Support 1 – 11127 Resistance 1 – 11260
Support 2 – 11064 Resistance 2 – 11300
Exhibit 2: Nifty Bank Daily Chart
With reference to our previous commentary, the midcap index
extended its lead yesterday and is approaching a crucial breakout
point, which once surpassed will unfold the next leg of the rally in
the broader market. Hence, the next couple of days would be quite
crucial for this pocket. Apart from this, Metal and Pharma continues
to outshine; but since they have been giving some relentless moves,
as a momentum trader, it’s advisable to book timely profits as well.