Technical & Derivatives Report
Bank Nifty started on a mild negative note and then it slipped into
a consolidation mode with 23400 acting as a base. Eventually, the
bank index ended with a loss of 0.93% tad below 23500 levels.
As mentioned yesterday, the bank index has entered into a
consolidation mode after its relentless upmove in the last two
weeks. Technically this consolidation is healthy for uptrend and as
of now, there are no signs of weakness. Going ahead it's always
tough to predict the end of the consolidation phase however one
should stick with the primary trend and use dips to enter longs. In
such a scenario, a stock-specific approach from the basket is likely
to give better trading opportunities however one needs to be very
agile in stock picking. As far as levels are concerned, immediate
support is placed around 23400 followed by 23080 on the flip
side, resistance is placed around 23700 and 23950 levels.
Key Levels
Support 1 – 23400 Resistance 1 – 23700
Support 2 – 23080 Resistance 2 – 23950
Exhibit 1: Nifty Daily Chart
Sensex (40626) / Nifty (11935)
Yesterday morning, global cues were sluggish and hence, we had a
flat opening in the absence of any triggers. Subsequently, Nifty
vacillated within the narrow band of 11900 – 12000 throughout the
remaining part of the session. In fact, the overall movement was so
choppy; the market was unable to hold any direction. Eventually, the
day ended on a muted note and Nifty managed to hold the 11900
mark convincingly.
It was yet another day of consolidation for our market after a
relentless rally of nearly 1200 points in a short span. Also, we reached
a psychological mark of 12000, so some sort of profit booking is very
much evident. However, it should not be treated as a trend reversal
unless we violate some critical levels. For the coming session, 11900
followed by 11867 would be seen as immediate support; whereas on
the higher side, 12000 – 12050 are the levels to watch out for.
Since the last couple of days, we have seen Nifty holding its support
levels and not correcting much; but if we look at the banking index,
it has shown some weakness and hence, if Nifty has to surpass
12000, the banking stocks need to participate once again. Also, only
a handful of heavyweight stocks have lifted markets higher in the last
couple of weeks, but the midcap stocks remained quiet. In fact, in
the last couple of sessions, we have seen some decent correction in
the broader market, which is not a good sign.
Exhibit 2: Nifty Bank Daily Chart
Hence, if the rally is to be called the robust one, the Nifty Midcap
index needs to breakout from the recent congestion zone. One
needs to keep a close track on these scenarios and wait for the
midcap index to breakout to place aggressive bets in the broader
market.
.Key Levels
Support 1 – 11900 Resistance 1 – 12000
Support 2 – 11867 Resistance2 – 12050