Technical & Derivatives Report
The banking index opened lower yesterday in tandem with the
benchmark. In the initial hour, BANKNIFTY sneaked below 31000,
but a strong buying in some of the heavyweight constituents
pulled the index higher to reclaim 31300-31400 around the
midsession. However as the second half kicked off, another bout
of buying started in banking names. As a result, the BANKNIFTY
eventually ended the session with handsome gains of 1.63%.
Since last 3-4 sessions, the banking space was on a back foot. But
yesterday single handedly not only it pulled the market in the
positive territory but also lead the Nifty beyond 14200. In our
previous commentary, we had mentioned how buying would
emerge beyond 31500 and this is exactly what we witnessed in the
latter half. The moment 31500 was crossed, the BANKNIFTY
accelerated its upward momentum. Going ahead, 32000 is the
immediate level to watch and a move beyond it would lead the
banking index towards record highs. On the flipside, previous
resistance of 31500 should now be seen as a key support.
Key Levels
Support 1 – 31500 Resistance 1 – 32000
Support 2 – 31000 Resistance 2 – 32300
Exhibit 1: Nifty Daily Chart
Sensex (48438) / Nifty (14200)
The U.S. market corrected sharply previous night on news of virus
surge and on worries over Georgia elections. This had a rub off effect
on the other global markets and as hinted by the SGX Nifty, our
markets too started the session marginally negative. However, the
damage was not much in our markets and after a couple of hours,
Nifty rebounded sharply and rallied to post new record and end the
day at 14200.
Our markets completely shrugged off the negative cues from the
global bourses yesterday and continued its winning streak to surpass
the 14200 mark. Since last few days the banking index was
consolidating within a range and just when it was required, this
sector took off to fuel this rally higher. Now, we have closed around
a crucial juncture of 14200 which is an important level as per some
retracement and extensions of the previous moves in the index.
However, if the banking space continues such momentum along with
the broader markets, then this should lead to further upmove in the
near term. On the upside, 14260 followed by 14320 would be the
next levels to watch whereas 14080 and 14000 would be seen as
immediate supports.
The Banking sector and the midcap space were buzzing yesterday
and could continue the momentum in the near term. Hence, traders
are advised to look for trading opportunities in stocks where price
upmoves are being supported by good volumes.
Key Levels
Support 1 – 14080 Resistance 1 – 14260
Support 2 – 14000 Resistance2 – 14320
Exhibit 2: Nifty Bank Daily Chart