Technical & Derivatives Report
Along with the benchmark index Nifty, the bank index aswell
started with a huge gap up on Friday however unlike Nifty it lacked
follow-up buying and from the word go slipped lower to erase a
major part of opening gains. Bank Nifty eventually ended with
gains of 0.40% at 32084.
During the major part of the week, we
witnessed outperformance by the bank index however on Friday
we witnessed underperformance and this might be because the
bank index is approaching its crucial levels of the all-time high.
Throughout the week, we witnessed good stock-specific action on
both sides of the trend and this may remain the favor as the result
season kicks off. Traders are advised to follow the stock centric
levels are concerned, immediate support is placed around 31900
and 31550 levels whereas resistance is seen around 32350 and
Support 1 – 31900 Resistance 1 – 32350
Support 2 – 31550 Resistance 2 – 32600
Exhibit 1: Nifty Daily Chart
We had a head-start for the inaugural week of the calendar year 2021
ove the 14000
mark and kept reaching new milestones as the week progressed.
During the mid-week, markets witnessed small intraday hiccups on
the back of some uncertainty with respect to the political
developments in United States. However, things settled down there
in the latter half of the week, which rejuvenated the US markets.
Hence, the smart rally in Nifty on Friday was mainly triggered by the
overall global optimism.
This has been one of the biggest as well as longest relentless rallies
in the history of Indian markets. Those who missed the bus, are
completely furious and at the same time, the set of contrarian traders
also must have gone for a toss. Honestly, as a momentum trader,
such rallies becomes extremely difficult to trade; because whenever
the short term tide reverses, it will catch lot of complacent traders
on the wrong foot. Nobody knows when it’s going to happen and till
the time we do not see any major reversal signs, better to be with
the flow by following strict money as well as risk management.
Support 1 – 14300 Resistance 1 – 14400
Support 2 – 14150 Resistance2 – 14550
As far as levels are concerned, we are in an uncharted territory and
hence, it’s better to go one step at a time. For this week, the
immediate levels can be seen around 14400 - 14550; whereas on
the lower side, the cluster of supports can be seen at 14300 - 14150
- 14000. The first sign of real weakness would come only below
14000 - 13900. At present, the ideal strategy for traders would be
to focus on individual stocks by following a strict exit strategy. We
would also advocate booking partial profits in this rally and avoiding
aggressive leveraged positions.
Exhibit 2: Nifty Bank Daily Chart