Yesterday, Bank Nifty started on a flat to mild positive note
however from the word go it started to come down. Subsequently,
the bank index then traded choppy within a range and ended with
a loss of 1.17% at 21411.
In our yesterday's outlook, we had clearly stated that the recent
upmove is just a bounce after the sharp fall and is likely to fizzle
out soon. Yesterday there was no follow-up move to the previous
two session's upmove and the bank index again underperformed
similar to the recent times. Going ahead we reiterate our view on
the bank index that any upmove is likely to face selling pressure
and the trend remains weak. As far as levels are concerned,
immediate resistance is placed around 21650 - 21900 levels
whereas support is placed around 21440 and 21000 levels.
Support 1 – 21440 Resistance 1 – 21650
Support 2 – 21000 Resistance 2 – 21900
Exhibit 1: Nifty Daily Chart
Sensex (37973) / Nifty (11222)
For the third straight session, our markets opened with an upside
gap owing to favorable cues from the global bourses. In the initial
trade, Nifty reclaimed the 11300 mark which was broken severely
last week. However, unlike the last couple of sessions, the bulls
looked a bit tentative at higher levels, which resulted in a healthy
intraday correction around the mid session. This was followed by
almost complete recovery in the penultimate hour, which again got
sold into to conclude the day on a flat note.
After two days of spectacular recovery, the market took a breather
yesterday; however, the volatility was slightly on the higher side.
Technically there is a reason for this tentativeness around the 11300
mark.The previous breakdown point of the 'Triangle' is placed
around it and importantly, the 61.8% retracement of the recent fall
from 11618.10 to 10790.20 precisely coincides around the same
mark. Hence, we continue to consider 11250-11350 as a sturdy wall
for a time being. For the coming session, we are likely to see further
weakness once Nifty sustains below 11180 to retest 11100 - 11000
levels. Hence, it's better to stay light and avoid getting carried away
by such intermediate recoveries.
Exhibit 2: Nifty Bank Daily Chart
On the sectoral front, the IT showed some strength yesterday along
with Metal counters and mighty RELIANCE. They helped NIfty
defend its key support yesterday; whereas the dragger banking
space provided selling pressure at higher levels. Although, individual
themes are playing out well but we still advocate refraining from
creating aggressive bets (overnight).
Support 1 – 11180 Resistance 1 – 11300
Support 2 – 11100 Resistance2 – 11350