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Sensex (36958) / Nifty (10926)
After an extended weekend, the markets started the week marginally positive with hopes of further up move as the index heavyweight Reliance Industries opened with a significant gap up post the various announcements in its AGM. However, the index witnessed selling pressure right from the start as the other index heavyweights along with the broader markets witnessed a sell-off. The selling pressure continued throughout the session and inspite of RIL ending with gains of 10%, the Nifty ended the session with a loss of above one and a half percent.
During the last week, a pullback move was seen in the index after forming a reversal pattern from the low of 10782.60. The pullback move extended upto the ‘200 DMA’ on Friday which was placed around 11170-11200. This range also coincided with the ’20 DEMA’ which had acted as resistance in the previous pullback move seen in July. The mentioned resistance played its role and the index resumed its short term downtrend yesterday with all the sectoral indices except Energy (courtesy to Reliance) ended in the red. On the daily chart, it is seen as the resumption of the ‘Lower Top Lower Bottom’ formation wherein Friday’s high of 11181.45 is seen as the recent lower high. Hence, this becomes an important resistance now for short term trading. On the flipside, 10870 (78.6% retracement of recent pullback) followed by the range of 10830 - 10785 are seen as immediate supports for the index. The overall market breadth too was in favor of the declines as the broader markets witnessed carnage and hence, traders are advised to stay light on positions.
Nifty Bank Outlook - (27729)
Bank Nifty started the truncated week on a negative note and the selloff continued throughout the session to end with loss of 2.47% at 27729. Along with the broader Index the banking index too failed to capitalize on the pullback move seen during the last two session of the week gone by. The bank index too has resumed the downside after witnessing resistance around 200DMA placed around 28400. Going ahead last week’s low around 27400 will now act as immediate support whereas on the flip side 28000 – 28300 will now act as an immediate resistance. Traders are advised to keep positions light.
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