Technical & Derivatives Report
Bank Nifty started the week on a flat note however along with the
broader markets it slipped lower to mark an intraday low of 23867.
During the penultimate hour, it witnessed a marginal bounce after
the announcement of Kotak Bank result to end tad above 24000
with a loss of 1.65%.
As mentioned above the technical structure for the bank index as
well remains positive and yesterday's fall can be taken as a
correction in line with global weakness. Going ahead, strong
support for the bank nifty is placed around 23300 and 23600
which is a confluence zone formed by 20EMA, 200SMA, and bullish
gap on the daily chart. As long prices hold the above support levels
the short-term trend remains positive. On the flip side, immediate
resistance is placed around 24450 - 24600. Volatility is likely to
increase as we move closer to the key event of the US Presidential
election and hence traders are advised to keep position tight and
trade with proper exit setup.
Support 1 – 23600 Resistance 1 – 24450
Support 2 – 23300 Resistance 2 – 24600
Exhibit 1: Nifty Daily Chart
Our markets started the proceedings for the expiry week on a muted
note owing to sluggish global cues. However, as the day progressed,
the trend became cautious on the back of global jitters, especially
from Europe. Due to the broad based selling for the major part of
the session, the Nifty went on to almost kiss the 11700 mark.
Fortunately, the fall got arrested in the last hour to restrict correction
slightly over a percent.
Last week, we witnessed some choppy moves but the overall bias
remained positive. In fact, we had mentioned how multiple technical
indicators are in favour of bulls. All those observations still remain
valid as long as we hold strong as well as crucial support zone of
11700 - 11660. Below this the short term trend reverses and hence,
one should avoid aggressive longs in the market thereafter. Till then
interpret this as a reaction to global development and stay hopeful
for recovery. For the coming session, 11820 followed by 11850
would be seen as immediate resistances.
Support 1 – 11700 Resistance 1 – 11820
Support 2 – 11660 Resistance2 – 11850
Exhibit 2: Nifty Bank Daily Chart
Yesterday, the breadth was extremely negative and the midcap index
which was placed at an interesting level, saw some decent correction.
Tha banking too corrected but the major culprit in yesterday’s
weakness was Reliance. We reiterate that the volatility is likely to be
on the higher side as we move closer to the US Presidential election.
Hence, traders are advised to stay light and keep strict losses for