Technical & Derivatives Report
On Friday, Bank Nifty started on a flat note however after few
minutes it witnessed a nosedive to not only slip towards
Thursday's low but to test the levels of around the 34400 mark.
This dip however got bought into as Bank Nifty gradually moved
higher throughout the remaining part of the session to eventually
end with gains of a percent reclaiming the 35000 mark. After
forming a 'Homing Pigeon' bullish reversal candlestick pattern on
Thursday, the bank nifty formed a bullish candle on Friday that
can be taken as a confirmation candle. Now going with this
pattern formation, 34200 - 33900 is key support and bank nifty
can head higher with immediate resistance placed around 35350
- 35670 levels. Some of the heavyweight from this space showed
outperformance on Friday and hence we recommend having
stock-specific trades with proper exit setup.
Key Levels
Support 1 – 34200 Resistance 1 – 35350
Support 2 – 33900 Resistance 2 – 35670
Exhibit 1: Nifty Daily Chart
Exhibit 2: Nifty Bank Daily Chart
Sensex (52976) / Nifty (15856)
The truncated week kick started with a surprising gap down on
Monday owing to some nervousness across the globe. As the day
progressed, the selloff augmented to close below the 15800 mark.
In fact there was a follow through seen to it on the subsequent day
to test sub-15600 levels. Fortunately the global peers had a good
relief move thereafter which resulted in a v-shaped recovery in our
markets in the latter half. Eventually, Nifty ended the action packed
week with negligible losses.
It’s been more than a month now; the Nifty is trapped in a range of
merely 500 points. This certainly is a slender range considering the
fact we are trading at much elevated levels. For the most part of
June, we were confined to domestic triggers only; but as we stepped
into the July month, the global factors started to influence our
markets to a great extent. Unfortunately, global peers experiences
some sell off when Nifty is about to reach the milestone of 16000
and on the other hand, some relief comes when we are at crucial
supports. Last week’s price action is exactly a replica of this. After
undergoing some price correction for first couple of days, we
witnessed a good relief rally to reclaim the important level of 15800
on a weekly closing basis.
Key Levels
Support 1 – 15760 Resistance 1 – 15880
Support 2 – 15680 Resistance 2 – 15960
This certainly bodes well for the bulls but considering the recent
trend, we are still not out of the woods yet. So rather than pre-
empting and getting caught on the wrong foot, we would wait for
Nifty to surpass the sturdy wall of 16000. If this happens then the
next immediate levels to watch out for would be 16200 – 16400.
Although they may appear not so far levels from 16000, we would
see good stock specific action in this period. Now as we reiterate, if
Nifty has to reach and surpass the magical figure of 16000, the
banking certainly plays a vital role here. It would be very important
for the banking index to surpass the 36000 mark, if we have to see
benchmark at new highs. Until then 35000 – 35500 are to be
considered as intermediate hurdles. On the lower side, the cluster
of supports for Nifty is placed at 15700 – 15550 – 15450 and for
BANKNIFTY, 34200 – 33900 are to be seen as make or break levels.
Any sustainable move below the lower end of this support zone
would reverse the short term trend in the downward direction.
Traders should keep a note of it and position accordingly.