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Sensex (40445) / Nifty (11921)
Market has seen stupendous run over the past couple of months without any major correction. During last week, we finally saw some respite to this ongoing optimism. First half can be considered as a part of consolidation wherein some encouraging signs seen on Wednesday as the hopes were built for yet another rate cut by RBI. However, on Thursday, the traders’ fraternity looked disappointed after RBI maintaining its ‘status quo’ on its repo rate. This resulted into a decent decline on the following day as well to register weakest week in last two months.
Clearly, last week’s tail end correction was a bit unexpected to us. But since the outcome from the policy was not on expected lines, such reaction was evident. The index is now standing at a crucial juncture and the trend for the forthcoming week would be decided by the price action in first couple of days. For the Nifty, the sacrosanct support is placed in the zone of 11883 – 11850. In case of Nifty sliding below it, we may see extension of the profit booking towards 11750 – 11700. So by no means, this is a trend reversal; rather we would construe this as a healthy correction before resuming the uptrend. On the other side, if Nifty manages to hold the support zone and starts staying beyond 12000, it would negate the possibility of extended correction and then the index can continue its upward trajectory towards 12100 – 12160.
Traders are advised not to get carried away by such in between hiccups, rather use such declines to add quality propositions in the portfolio. Since the selling was seen across the board, there is nothing much to comment on sectoral front. Despite this, we continue to like the ‘Pharma’ and ‘Metal’ spaces, which we believe are likely to provide potential trades.
Nifty Daily Chart
Nifty Bank Outlook - (31341)
During last week, BankNifty index witnessed some correction in the intial couple of sessions. During mid-week, the index witnessed an upmove but it faced resistance around 32000- 32200 and then its corrected in the end of the week to end with a weekly loss of 1.89 percent. During the fag end of the wek, the BankNifty too witnessed some selling pressure as the broader markets witnessed a sharp correction. The index has ended near its '20 DEMA; support and hence it would be crucial to see how its behaves around this support. The immediate resistance for the index is seen around 31500-31650 range and the index needs to surpass this to resume its momentum. A failure to do so could result into some further correction towards 31050 and 30800. However, the broader trend continues to be positive and this downmove should be seen as a correction within an uptrend which would provide good opportunities for positional traders to buy on dips. As of now, swing traders are advised to keep a wait and watch approach and look for developments as per above mentioned probabilites.
Nifty Bank Daily Chart
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