Technical & Derivatives Report
Exhibit 1: Nifty Daily Chart
Our benchmark started slightly positive yesterday; whereas the
banking index opened flat. This divergence broadened as the day
progressed as we saw BANKNIFTY having a sharp cut whilst the
Nifty had a small decline in the first half. In fact to surprise, we
witnessed benchmark recouping all losses at the close but
banking index failed to participate in the recovery. Eventually, it
ended the session tad above the 35000 mark by shedding nearly
a percent.
Since last few days, the financial space is not moving at all and
yesterday it showed first sign of weakness. Although there is not
much damage done yet, 34960 – 34900 is to be seen as a crucial
intraday support zone. If we see it sliding and sustaining below
this junction, we could see this profit booking extended towards
34700 – 34500. Hence, it would be important for it to hold this
support first and then reclaiming its position above 35200 –
35300 in order to trigger some positivity. In this case, we can see
a pleasant day to retest 35500 – 35700 levels. Considering these
observations, the coming session is expected to be an interesting
one.
Key Levels
Support 1 – 34900 Resistance 1 – 35300
Support 2 – 34700 Resistance 2 – 35500
Exhibit 2: Nifty Bank Daily Chart
Looking at the change of momentum between the sectors, traders
are advised to focus on stock specific trades from the mentioned
sectors where we could see some relative out performance in the
next couple of sessions.
Support 1 – 15670 Resistance 1 – 15800
Support 2 – 15600 Resistance 2 – 16000
Sensex (52276) / Nifty (15740)
Nifty started the session marginally positive but it corrected from
the opening level and entered sub 15700 in the first hour of the
trade. However, the index then recovered from its lows and ended
the day marginally in the red around 15740.
The index is trading around its resistance of 15770-15800 which we
had mentioned about in yesterday's market outlook. Nifty corrected
initially led by the banking space but once again, the ‘20 EMA’ on
the hourly chart provided support to the index and it recovered
gradually from that support. The market breadth continued to
remain positive, however, a lot of sector rotation was seen yesterday
since the banking space took a backseat. The defensive sectors
witnessed buying interest with IT leading the momentum in the
morning trade, then some FMCG stock witnessed interest and at the
end, the Pharma stocks made a comeback. This indicates that while
the uptrend continues, some time correction/consolidation at the
crucial juncture is seen and the momentum seems to be shifting to
the above mentioned sectors. As far as levels are concerned, the
immediate supports are placed around 15670 and 15600 while
resistance is seen in the range of 15770-15800. A move above
15800 would then lead to a resumption of momentum in the index
towards 16000.