Technical & Derivatives Report
Exhibit 1: Nifty Daily Chart
Our markets had a pathetic start for the new trading week led by the
financials as we saw BANKNIFTY opened with a massive cut of nearly
800 points. In fact, things became worst in the initial trades after it
dropping further to violate Budget day’s low. During the remaining
part of the day, there was no respite seen in banking counters to test
the 30500 mark. Eventually, despite a tiny bounce towards the fag
end, the banking index posted a biggest percentage wise single day
fall in the recent months. Since last week and a half, the BANKNIFTY
was hovering around its strong support zone of 32400 – 32200. The
bulls were not letting this support break and were making numerous
attempts to rebound. But since there was no conviction seen in this
attempt, we remained sceptical on all intraday recoveries and did not
get carried away by the momentum. We also highlighted how
bottoms are made in a hurry and it does not take this much time as it
was taking since few days. This was a clear indication of banking
index breaking this support zone and yesterday at the opening itself,
these levels were breached brutally. Now the way BANKNIFTY
plummeted like a bottomless pit, any recovery in next few days is not
likely to sustain. Hence, 31000 – 31300 are to be treated as
immediate hurdles now and on the downside, 30200 – 29700 can be
tested soon.
Key Levels
Support 1 – 30200 Resistance 1 – 31000
Support 2 – 29700 Resistance 2 – 31300
Sensex (47883) / Nifty (14311)
Our markets started the week with a gap down on back of worries over
rising cases of Covid-19 in our country in this second wave. Our
markets completely ignored the global cues yesterday and post the
gap down, we witnessed a sell-off across and ended the day tad above
14300, with a deep cut of over three and a half percent.
The rising cases of Covid -19 and a fear of probable lockdown in some
parts of the country led to a sell-off in our markets which resulted in a
huge underperformance compared to the global peers. Post the gap
down, there were no major pullbacks during intraday and the Nifty
even breached 14250 mark in the last hour before ending the session
tad above 14300. Nifty has breached its ‘Rising Trendline’ support and
has ended around the 25th March swing low. The range of 14264-
14240 is the immediate support zone which is the swing low and the
‘89 day exponential moving average’. Below this, the retracement
support comes in the range of 14070-14000. Although the index is
nearing its important levels, it would be prudent to avoid aggressive
bets and watch for the price momentum as the broader markets have
witnessed sharp sell-off. On the flipside, 14465 and 14590 would now
be the immediate resistances on pullback moves.
Key Levels
Support 1 – 14240
Resistance 1 – 14465
Support 2 – 14200 Resistance2 – 14590
Exhibit 2: Nifty Bank Daily Chart
The Banking and Financial stocks which have good weightage in the
Nifty index as well have been under-performing recently and many
stocks from this sector witnessed a cut of 5-10 percent yesterday. The
only relative outperforming space yesterday were the Pharma stocks.
However, although a positive traction was witnessed in most of the
stocks from this sector at the start of the day, but at the end the
momentum shifted to only fewer names. Thus, it is advisable to stay
light on positions and avoid aggressive bets ahead of the mid-week
holiday and keep a watch on how the index behaves around the above
mentioned levels.