Technical & Derivatives Report
On Friday, Bank nifty started on a positive note and then traded in
a range throughout the session to eventually end with half a
percent gains tad above 21750 levels.
During the last week, the bank nifty started on a strong negative
note however on our expected line it respected the support of
swing low at 21000 that triggered a smart bounce back. In the
second half of the week, the bank nifty traded within a range with
the levels around 22000 acted as a stiff resistance. In this week,
Bank Nifty may remain in the range of 21000 - 22000 and the next
directional move can only be seen on a range breakout from the
above levels. Traders are advised to keep a tab on the above levels
and trade accordingly.
Key Levels
Support 1 – 21370 Resistance 1 – 21936
Support 2 – 21000 Resistance 2 – 22000
Exhibit 1: Nifty Daily Chart
Sensex (38041) / Nifty (11214)
We inaugurated the week on Monday on a flat note; however, right
from the word go, markets looked a bit depressed and as a result,
we witnessed sustained selling throughout the day. Eventually, the
Nifty marked the weakest session in the recent past. However, the
‘200-SMA’ level of 10870 acted as a sheet anchor for the bulls and
despite the strong selling momentum there, Nifty managed to hold
this sacrosanct support. The optimist traders somehow managed to
sail through this difficult session and hence, with the help of
positivity across the globe, our markets too started rebounding
sharply. Post the smart recovery on Tuesday, the index consolidated
by maintaining its positive posture to conclude the action-packed
week tab above the 11200 mark.
In our opinion, the way markets are placed, this week would be quite
crucial and hence, one should be keeping a close eye on few key
levels. Although the market has managed to recover well, it would
be a daunting task surpassing the sturdy wall of 11300-11350. Till
the time it is not conquered successfully, we advocate some caution.
Let’s understand, technically, why this should be considered an
important junction. Firstly, the 78.6% retracement of the entire fall
from 12430.50 to 7511.10 comes around it. Secondly, the 100%
‘Price Extension’ of the first up leg (7511.10 - 9889.05) from
8806.75 precisely coincides around 11300-11350. And now we are
standing at the pullback level of the ‘Parabolic SAR’ which has been
following the entire uptrend, has finally given some sign of weakness
(due to Monday’s negative close) for the first time in the entire up
move. Considering all these observations, we advise traders to stay
light and should ideally take some money off the table. On the
downside, a move below 11100 would lead to immediate correction
towards 10950 - 10880.
Exhibit 2: Nifty Bank Daily Chart
Markets were on recovery mode first and then remained in a slender
range of 150 points for three sessions. Looking at the benchmark
index, it might appear a boring week (especially the second half); but
if we meticulously observe the price action in the broader markets,
we would rate it as one of the finest weeks for individual stocks in
the last few weeks. Finally, on Friday, the NIFTY MIDCAP 50 index
posted a smart rally to surpass its recent hurdles. Hence, traders are
advised to stay focused on individual stocks in this week; but the
aggressive positions should be avoided till the time important levels
are not surpassed convincingly.
Key Levels
Support 1 – 11127 Resistance 1 – 11300
Support 2 – 11100 Resistance 2 – 11350