Technical & Derivatives Report
Following the positive momentum from the previous session, the
bank nifty index started with a gap up opening however there was
no follow-up buying, and the bank nifty remained in a range to
eventually end with marginal gains of 0.20% at 35938.
If we meticulously observe the daily chart, the bank index for the
past one month is trading in a 'Descending Triangle' pattern and
after bouncing from the lower side of this pattern the prices have
now reached the higher side of this pattern. Currently, the dynamic
level of this pattern is placed at 36500 and 34600 and as the
trading range of this pattern is getting coiled one can expect a
breakout from this pattern in the very near term. The pattern
breakout can trigger the next directional move and till then traders
are advised to have a stock-specific approach from this basket with
a proper exit setup.
Support 1 – 35400 Resistance 1 – 36500
Support 2 – 35300 Resistance 2 – 36700
Exhibit 1: Nifty Daily Chart
Sensex (51280) / Nifty (15175)
Now a days it’s very common to have a gap up opening in our
market and on Wednesday too, we started with more than half a
percent gains around 15200. In the first half, index cooled off a bit
to fill the entire opening gap. However, post the mid-session, the
buying once again resumed at lower levels to conclude the weekly
expiry convincingly around the 15200 mark.
The overall undertone has been bullish; but the momentum is clearly
lacking in all key indices. As far as levels are concerned, 15220 –
15275 are to be seen as immediate hurdles. If index has to gain any
momentum in the upward direction, it is possible only after
surpassing the above mentioned resistance zone. On the flipside,
15100 – 14925 are the levels to watch out for. With a near term view,
we still remain a bit sceptical and hence, advise traders to avoid
aggressive bets even if Nifty manages to breakout on the higher side.
Despite indices are stuck in a range, the individual stocks are still
providing better trading opportunities but going ahead, one needs
to be very selective in stock picking as well.
Exhibit 2: Nifty Bank Daily Chart
In our sense, the overall intraday range has shrunk considerably and
hence, very soon we are likely to see a breakout on either side from
this consolidation phase. Sectorally, IT and Auto space kept buzzing
throughout the day; whereas the banking had a muted session after
Tuesday’s outperforming moves. Also, the broader end of the
spectrum saw some bounce back after undergoing some profit
booking in last couple of sessions.
Support 1 – 15100 Resistance 1 – 15220
Support 2 – 14925 Resistance2 – 15275