Technical & Derivatives Report
The banking index too opened on a positive note and surpassed
the 22000 mark. However, the index then consolidated and gave
up some of the gains to end at 21900.
The banking index has been consolidating within a range of
21000-22000 since last few sessions. A decisive breakout above
the higher end could then lead to an upmove in the short term in
this sector. Traders are advised to look for stock specific
opportunities and trade with proper risk management. Above
yesterday's high of 22070, intraday targets will be seen around
22200 and 22350. On the flipside, intraday supports are placed
around 21770 and 21650.
Key Levels
Support 1 – 21770 Resistance 1 – 22070
Support 2 – 21650 Resistance 2 – 22350
Exhibit 1: Nifty Daily Chart
Sensex (38182) / Nifty (11270)
We kickstarted the proceedings with a decent upside gap, owing to
cheerful global bourses. However, in the initial trades, our markets
extended gains rapidly and, in the process, not only hastened
towards 11300 but also surpassed it convincingly. However, post the
initial exuberance, benchmark slipped into a consolidation mode
since the verdict on Telecom’s AGR dues was awaited. In fact, during
the latter half, traders chose to take some money off the table to be
on the safer side. Despite all this, Nifty managed to close with
precisely half a percent gains to reclaim the 11250 mark.
Since the last couple of days, we have been advocating some
caution, because Nifty has approached a strong resistance zone of
11300-11350 and although there is no sign of weakness yet, it will
not be easy for the index to overcome this sturdy wall. Only a major
trigger on the global or domestic front would be required if we have
to unfold the next leg of the rally. Till then better to take some
money off the table and wait for further development. Now with
yesterday’s price action, the daily chart depicts a ‘Doji’ pattern. This
indicates some uncertainty and this clearly reflects what we
explained in the above section. But with such price behavior,
yesterday’s low has now earned some significance. Going ahead, if
we sneak and sustain below 11238, this will result in some
immediate decline towards 11175 – 11120 - 11064 levels.
Exhibit 2: Nifty Bank Daily Chart
On the sectoral front, Pharma stocks continue with their dream run
and clearly there is no stopping for it. Also, few counters from Auto
and Capital Goods showed tremendous strength. The Midcap space
which has been buzzing since the last few days, has been the centre
of attraction. Traders are advised to keep following such stock
centric moves; but we reiterate it is also important to keep booking
profits and avoid aggressive bets overnight.
Key Levels
Support 1 – 11238 Resistance 1 – 11300
Support 2 – 11120 Resistance 2 – 11350