Published on 11/01/2018 9:06:37 AM | Source: Angel Broking Pvt Ltd
The Nifty Bank importance of the resistance zone of 25780-25800 - Angel Broking
Sensex (34433) / Nifty (10632)
The action packed day eventually concluded with a negligible cut around its previous day’s close tad below the 10650 mark. It sounds strange when we see overall intraday trading range for the benchmark index; but, look at what ‘IT’ index has done yesterday. We saw a mesmerizing rally across all ‘IT’ counters post the midsession. And clearly the shining star was ‘TCS’ as we saw this heavyweight clocking decent gains of nearly 4% to close at record highs one day ahead of its 3QFY2018 earnings.
As far as Nifty is concerned, it has once again precisely respected our mentioned trading range of 10660 – 10588. Clearly, there was some sort of index balancing seen during the mid session as we saw IT space zooming to a great extent and on the other hand, banking conglomerates along with some other heavyweights remained subdued. Due to yesterday’s price action, the daily chart exhibits yet another narrow range candle; indicating exhaustion in benchmarks. We reiterate that traders should remain light on index and keep a close watch of this trading range (10660 – 10588). We just highlighted how ‘IT’ pack showed some interesting move and hence, this pocket remains in focus along with very few selective midcaps for the coming session. On the other hand, we are seeing early signs of tiredness in the ‘Metal’ space after a relentless run. Short term traders should look to lighten up their longs especially in names like, Vedanta, Tata Steel and Hindalco. Also, the overall chart structure for Voltas and Bajaj Auto seems a bit distorted on shorter time frame.
Nifty Bank Outlook - (25617)
The Nifty Bank index opened on a flat note yesterday and traded with a negative bias during the session. The index ended the day with a loss of 0.34 percent over its previous session's close. Since last few days, we have been highlighting the importance of the resistance zone of 25780-25800 as only a breakout above the same will bring some directional move in the Nifty Bank index. As mentioned above, while the 'IT' pack was seen in momentum yesterday, the 'Banking' stocks continued the underperformance. Hence, we continue with our advice for traders to focus on stock specific moves and take a directional bet on the index only above 25800. The intraday supports for the Nifty Bank index are placed around 25525 and 25420 whereas resistances are seen around 25630 and 25800.
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