Technical & Derivatives Report
On Friday, Bank Nifty started on a flat note and then traded
within a range for the major part of the session. However, a
strong buying was seen in the last hour of trade which pushed
the bank index higher to end with gains of 1.71% at 21966.80.
During last week, Bank Nifty underperformed the benchmark
index for major part of the week. However, the positive
divergence on the hourly chart of Bank Nifty which we
mentioned in our report triggered a smart bounce back on
Friday. Now since Nifty has given a breakout above its resistance,
it is quite likely that the banking index would show a catch up
move in next few days to cover up the recent underperformance.
Hence, traders are advised to trade with a positive bias and look
for buying opportunities within the sector. As far as levels are
concerned, immediate targets are seen around 22320 and 22650
whereas supports are placed around 21680 - 21550 levels
Support 1 – 21680 Resistance 1 – 22320
Support 2 – 21550 Resistance 2 – 22650
Sensex (37020) / Nifty (10902)
It was indeed an action packed week for our markets, rather, we
should say for global markets. Trading started on Monday with a
decent upside gap owing to favorable global cues. However, this
turned out to be a formality as index gave up a major portion of
its morning gains. This was followed by a bout of profit booking
to mark one of the weakest sessions in the recent past. But the
real action started from there on. On the following day, we
witnessed a massive bump up at the opening; courtesy to smart
rallies in global peers after the recent development on the vaccine.
Everything looked hunky dory but post Reliance AGM; the stock
took a nosedive and so as our markets. We were back to 10600
but again the market had completely different plans as we
witnessed a smart recovery first and then a consistent rally to
conclude the week at new 4-months high.
Our markets saw a roller-coaster move throughout this week; in
fact during the day also swings were wild, barring Friday’s session
where we witnessed a unidirectional move (northwards). Now let’s
see what charts have to say for the forthcoming sessions. We had
anticipated a possible breakout from the sturdy wall of 10850
during this week. Honestly we expected it in the initial part of the
week but we went through a correction first and hence, the
conviction became stronger during the midst of the week about
Nifty surpassing hurdle soon. Finally with Friday’s late surge in
banking conglomerates, Nifty has confirmed a breakout above
10850, which resembles a ‘Bullish Flag’ pattern on daily chart.
Now, the banking seems
to have regained strength which we
believe should lead the move in this week.
As far as levels are concerned, the up move should ideally get
extended towards the 78.6% retracement zone at 11100 – 11200.
In the previous weekly commentary, we had mentioned these levels
and anticipated a possible correction after reaching these levels
first. But since we have already seen a small decline early this week,
we will have to reassess the situation whether the markets have
further steam left to go beyond it or not. So from here on, one step
at a time is the strategy to follow and better to timely book profits
as well in the rally. Traders are advised to keep following stock
specific moves and the base now remains at 10660 – 10560.
Support 1 – 10850 Resistance 1 – 11000
Support 2 – 10760 Resistance 2 – 11100