Technical & Derivatives Report
Nifty Bank Outlook - (21640)
On Friday, the Banknifty index started on a flat note however the
rub-off effect from the previous session immediately pulled the
index lower. Fortunately, the damage was not much and after a
choppy session, the bank index eventually ended near
the opening levels tad below 21650 levels. During the last week,
we have been mentioning the bank nifty trading in a rising channel
pattern and for the last few sessions, the prices has been gyrating
around the lower range of the pattern. Now prices are also trading
around the 50SMA which previously acted as support and hence
next few sessions of this week will be very crucial for the near term
direction. If weakness continues then bank index may head
towards 21150 and 21000 levels however on the flip side, the
index needs to break above 22350 for a probability of any
pullback move. Traders are advised to keep positions light and
have a stock-specific approach within the sector.
Key Levels
Support 1 – 21150 Resistance 1 – 22000
Support 2 – 21000 Resistance 2 – 22350
Exhibit 1: Nifty Daily Chart
Sensex (37607) / Nifty (11073)
During the last week, the market started the proceedings on a
sluggish note in the absence of any trigger on the domestic as well
as global front. On the following day, we witnessed a good broad-
based rally to mark fresh 4-months high beyond the 11300 mark.
However, the way things looked at the end of Tuesday’s session, it
just turned out to be an illusion in the remaining part of the week.
Although there were a couple of attempts made around 11300, the
market was unable to display the strength in a similar fashion. As a
result, we witnessed some profit taking in the latter part of the week
to conclude around the lower end of the weekly range.
Market finally snapped its six-week winning streak due to some
weakness around 11300. However, the damage is not big and
hence, as of now should only be interpreted as a profit booking after
a relentless rally. Towards the end of the week, we were seeing
11050 as a key support; but the way markets behaved on Friday
around it, this does not appear to be an important support. Hence,
we would rather extend the range slightly on downside and would
observe key supports around 10950-10870 for the forthcoming
week. In case if profit booking extends towards these mentioned
levels, it should still be considered as a corrective move and not the
actual trend reversal. In our sense, the actual weakness would start
only if Nifty sustains below 10870 and hence, till then one should
continue with a stock specific positive bias. However, on the flipside,
11300-11350 has also become a strong ceiling and the fresh leg of
the rally would only unfold above this. Till then traders are advised
to remain light within a slightly bigger range of 10870 – 11350.
Exhibit 2: Nifty Bank Daily Chart
For the early part of the week,
considered as an immediate resistance zone. The banking space
has been the weakest link and the way it’s placed, the directional
move in benchmark would mainly be triggered by the banking
stocks only. Hence, all eyes would be on it. Apart from this, the
entire Pharma space has been once again on a roll after a brief
pause and there were some other sectoral movers also, that kept
buzzing and bucking the trend. So, the pragmatic approach
would be to focus on individual stocks till the time market
remains in the above-mentioned range.
Key Levels
Support 1 – 11000 Resistance 1 – 11200
Support 2 – 10950 Resistance 2 – 11250