Technical & Derivatives Report
Bank Nifty started on a negative note around the previous
session low and remained within the negative territory for the
first couple of hours. Subsequently, in the second half, we
witnessed buying in some of the heavyweights banking stocks
that pushed the bank index above the last two sessions high to
eventually end with gains of 1% at 32339.
The Bank Index is placed at an important juncture where the dips
are getting bought with the overall uptrend however the upside
as well is capped with prices reaching all-time high levels. With
yesterday's momentum, the prices are likely to test all-time high
levels at 32600 however the real test will be to surpass it
convincingly. On the flip side, yesterday's low around 31725 can
be taken as sacrosanct support. For the last few days we have
seen a mixed bag of pictures as far as stock-specific moves are
concerned and going ahead traders are advised to continue with
the stock-centric approach that are providing opportunities on
both sides. However, while doing so one needs to have a proper
trade setup.
Key Levels
Support 1 – 32000 Resistance 1 – 32600
Support 2 – 31725 Resistance 2 – 32850
Exhibit 1: Nifty Daily Chart
We had a sluggish start as indicated by the SGX Nifty early in the
morning. However, it was merely a formality as we witnessed RIL
and few banking heavyweights lifting the benchmark index higher
in the subsequent hours. The upward momentum continued in the
second half to add another half a percent to close tad above the
14550 mark.
Barring couple of days breather in the previous week, the markets
continued its merry run in the new calendar year as well. Almost
every day in the first half, market gives small correction and that
decline is getting bought into comfortably by the bulls. Honestly,
we have not seen such kind of optimism over the past decade or so
and hence, it’s becoming difficult to ride this move now. In fact, the
contrarian bets from retail participants are not letting the markets
fall, which is the practical aspect of the relentless move. Without
thinking much, it’s better to follow levels and take one step at a
time. On the higher side, 14600 is the next level to watch; whereas
on the lower side, 14500 – 14430 – 14380 to be seen as
immediate supports.
Key Levels
Support 1 – 14500 Resistance 1 – 14600
Support 2 – 14430 Resistance2 – 14680
Yesterday, after a long underperformance, the RIL took the large
and led from the front along with few banking heavyweights. Every
day some new theme comes up to keep up the momentum; but
since last couple of days, it is observed that individual stocks are
witnessing some profit booking as well. Hence, one needs to be
very selective and look for trading opportunities on the both sides
of trend. Also, we reiterate that as a momentum trader, one should
keep booking profits and avoid leveraged positions overnight.
Exhibit 2: Nifty Bank Daily Chart