Technical & Derivatives Report
Nifty Bank Outlook - (19913)
The Banking index started trading for the week on a negative note
and corrected during the day to breach the 20000 mark. Post
registering a low around 19750, the index saw mild recovery at
the end and ended with a loss of over 700 points.
The index has retraced much of Friday's move from lower levels
yesterday but is hovering around its 20 DEMA support. Friday's
low around 19500 is around the 50 percent retracement of the
previous upmove and is thus seen as immediate support. Traders
are advised to trade with a stock specific approach in stocks within
this space. Also, from a positional perspective, one can use this
decline as a buying opportunity. The immediate resistance for the
index is seen around 20500 and 20800.
Key Levels
Support 1 – 19650 Resistance 1 – 20500
Support 2 – 19500 Resistance 2 – 20800
Exhibit 1: Nifty Daily Chart
Sensex (33229) / Nifty (9814)
It seems that the rising concerns over the second wave of
coronavirus is haunting market participants across the globe. The
US markets had already fallen nearly 10% last week and yesterday
morning, the start for the Dow Jones Futures was very much in
continuation with this sell off. This clearly had a rub off effect on
our markets as well and hence, post the moderate gap down
opening, we extended losses in the first half to test sub-9750
levels. Fortunately, the damage was not as severe as it was looking
at one point. Due to decent recovery in the last couple of hours,
the Nifty managed to reclaim the 9800 mark at the close.
Friday’s v-shaped recovery turned out to be a deception for most
of the bulls and including us, most of the participants expected a
good start yesterday. But markets are superior and such deceiving
nature is a part and parcel of the market. Now taking a glance at
the daily chart of global markets, mainly DOW JONES and DAX,
we can observe a cluster of supports for both these indices and
the next couple of days could be the trend deciding sessions. At
our end, we still remain hopeful and expect the Nifty not to fall
below 9500 now. Before this, 9750 – 9675 can be seen as intraday
supports. On the flipside, 9925 – 10000 remains to be a sturdy
wall and if the index has to regain any strength, it needs to again
enter a five-digit territory soon.
Exhibit 2: Nifty Bank Daily Chart
At present, traders are advised not to get carried away by this global
sell off and should ideally stick to stock centric approach. The
midcap index is interestingly poised and hence, if we see a reversal
in major indices, the broader market is likely to outperform.
Key Levels
Support 1 – 9750 Resistance 1 – 9925
Support 2 – 9675 Resistance 2 – 10000