Technical & Derivatives Report
Bank Nifty as well started the week on a positive note and in
the first few minutes itself surpassed the levels of 24000 with
ease. This was however followed by profit booking and then
consolidation to eventually end with a loss of 0.56% at
23712.80.
After a stupendous rally last week, the hourly oscillators were
in deep overbought zone and some profit booking was
inevitable. This is however just a breather for the bulls before a
fresh start towards the northward direction. Traders are hence
advised to use further such profit booking or dips as a buying
opportunity. Preferably a stock-specific approach from the
basket will a better option. As far as levels are concerned,
immediate support is placed around 23450 and 23300 levels
whereas resistance is placed around 24000 and 24250 levels.
Key Levels
Support 1 – 23450 Resistance 1 – 24000
Support 2 – 23300 Resistance 2 – 24250
Exhibit 1: Nifty Daily Chart
Sensex (40594) / Nifty (11931)
Trading for the week started with a good upside gap as indicated
by the SGX Nifty early in the morning. Within the first five minutes
of trade, Nifty conquered the milestone of 12000, which is the
outcome of the stupendous recovery from the March lows in such
a short span. In fact, in the last couple of weeks also, we had a
remarkable rally after testing the 200-day SMA around 10800.
Post the initial hour, the market witnessed some profit booking
at higher levels, which was then followed by a consolidation to
conclude the day on a flat note.
Yesterday, for the first time in the last few trading sessions, the
bulls looked a bit tentative at higher levels, especially in the
banking space after a strong close on Friday. The prices were
extremely overbought and since the recent move was swift, some
in between profit booking was very much on cards after reaching
the psychologically level of 12000. This is what we had
mentioned in the weekly article that one should avoid chasing
prices now and should wait for intraday dips to create positions.
Yesterday’s move as of now should only be construed as a profit
taking and not the complete reversal. As far as levels are
concerned, 11867 – 11800 should be treated as a support zone;
whereas on the higher side, 12000 – 12050 are the levels to
watch out for.
Exhibit 2: Nifty Bank Daily Chart
Addition to this, we would like to draw attention towards the
movement in the Nifty Midcap index. This space saw some
decent profit booking yesterday and is the only factor missing to
make the recent rally as a healthy one. The midcap index is placed
at a crucial juncture and till the time it does not surpass its recent
congestion zone, traders are advised to be very selective in stock
specific trades.
.Key Levels
Support 1 – 11867 Resistance 1 – 12000
Support 2 – 11800 Resistance2 – 12050