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Sensex (57809) / Nifty (17267)

The Indian equity market witnessed some strong whipsaw movement, wherein a V-shaped recovery trimmed down the initial losses in the benchmark index and has put a halt to the selling spree. Though Nifty settled the day on a muted note with mere gains of 0.15 percent at 17239 levels, an indecisiveness among the market participants could be sensed with the increased volatility and the index hovering near its crucial support zone.

The formation of a long-legged Doji candlestick pattern could be considered as a constructive setup however, the lack of leadership from the major sectors is a matter of concern for the market participants. As far as levels are concerned, the 17000 mark is the crucial support for the benchmark index followed by the previous swing low of 16836, while any breach below this could trigger a concerning factor for the investors. On the higher end, the 50 percent Fibonacci is expected to act as the immediate resistance zone placed around 17380 levels, followed by 17500 in the near future.

The last minute of traction in the benchmark index shows optimism at the strong demand zone. However, the reversal signal is yet to be confirmed with a strong closure above the mentioned resistance zone. At the current juncture, it is advisable to stay cautious and focus on the stock-specific front as the volatility is yet to cool off.

Nifty Daily Chart

Nifty Bank Outlook - (38028)

The Nifty Bank index has witnessed a volatile day of trade wherein a smart recovery trimmed down the initial losses and snapped the selling spree. The index, though settled on a subdued note with mere gains of 0.09 percent, was a tad above the 38000 mark but showcased a strong pull back from the critical support zones.

The index managed to sustain above the 21 DEMA with a ‘hammer’ formation on the daily chart, construing the initial sign of reversal. However, the confirmation is yet to be made with a follow-on positive closure. At present, the immediate support is pegged around the 37500 mark followed by the last candlestick’s low of 37300 odd zone, while on the flip side, 38800-38900 is the immediate hurdle for the index. A closure above the same could only trigger the fresh round of addition in the index with upside potential to test the recent swing high, till then a range bound movement could be seen in the near term. Considering the event of the MPC outcome due this week and the technical setup, it is advisable to stay cautious as volatility is likely to remain on the higher side, and to look out for opportunities on the stock-specific front.

Nifty Bank Daily Chart

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