Technical & Derivatives Report
Nifty Bank Outlook - (22105)
Post opening on a positive note, Bank Nifty corrected in the first
hour of trade and traded with negative bias to register a low tad
above 21600. It then gradually recovered and rallied in the later
part of the day to end with gains of over a percent on yesterday's
close.
As mentioned in our previous report, the Bank nifty is seen trading
within a 'Rising Çhannel' and it recovered from the support end of
the pattern in yesterday's session, which is a positive sign. As far
as this support at 21500-21600 is intact, we expect the index to
again head towards the recent swing high. Thus, traders are
advised to look for buying opportunities within this space from a
near term perspective and trade with a positive bias. The intraday
supports for the index are placed around 21850 followed by
21600-21500 range; whereas resistances are seen around 22350
and 22600.
Key Levels
Support 1 – 21850 Resistance 1 – 22350
Support 2 – 21500 Resistance 2 – 22600
Exhibit 1: Nifty Daily Chart
Yesterday too our markets opened higher as indicated by the SGX
Nifty; but unlike Monday, the lead was there to stay this time. After
a positive start, markets extended gains in the initial hour; but all of
a sudden, the banking index once again took a nosedive, resulted in
erasing of some gains in benchmark. However, post the midsession,
the entire market just took off and the smart recovery in banking
space added fuel to the spectacular rally to eventually reclaim the
11300 mark for the first time in last four months.
Yesterday, we had mentioned about Nifty showing the sheer
outperformance and banking being the weakest link. The similar
trend was followed yesterday too, but this time, the Bank Nifty
showed some encouraging signs. As far as Nifty is concerned, we
finally witnessed a breakout beyond 11200-11250, which confirmed
a ‘Bullish Flag’ pattern on intraday time frame. The way charts are
shaped up, we expect the extension towards 11350-11400 in
coming trading session. If banks manage to participate in the similar
way, a move beyond 11400 also cannot be ruled out.
Traders are advised to stay positive and a decline towards 11250-
11200 should now be treated as a buying opportunity. Mostly we
see Bank Nifty influencing the move in Nifty but yesterday it
appeared as if the strength in Nifty pulled the Bank Nifty higher.
Key Levels
Support 1 – 11250 Resistance 1 – 11350
Support 2 – 11200 Resistance 2 – 11400
Exhibit 2: Nifty Bank Daily Chart