Sensex (37688) / Nifty (11095)
The index started yesterday’s session marginally positive in line with the global cues. However, the initial dip in first 15 minutes of trade was bought into and the index then rallied higher throughout the day to end with gains over 200 points.
Nifty had ended Monday’s session in the vicinity of its support zone of 10870-10900, which was the previous breakout level as well as the ‘200 SMA’ on the daily chart. This support zone played it role well and the index resumed the momentum yesterday led by the index heavyweights such as Reliance Ind. and HDFC Bank. Apart from the index heavyweight RIL, the private banking space too participated as the Bank Nifty defended its swing low of 21027. With this pullback, the index continues the ‘Higher Top Higher Bottom’ structure and forms a higher low i.e. a higher support base at 10880. Thus, the near term continues to be positive now till 10880 remains intact. Hence, traders are advised to trade with a positive bias and look for buying opportunities in intraday declines. On the flipside, 11250-11300 would be immediate target zone to watch out for.
Yesterday we mentioned about the positive market breadth in falling market with midcaps showing a relative outperformance. The midcap space continued its momentum and now the banking and financial stocks too could participate to cover up for their recent underperformance. Thus, we continue with our advice to look for such stock specific opportunities which could provide good returns in the near term.
Nifty Daily Chart
Nifty Bank Outlook - (21491)
Markets can be very unpredictable at times and the price action in the last couple of sessions completely justifies this statement. The banking has been dragging continuously for the past few days and with Monday's fall, the Bank Nifty reached its crucial swing low of 21027. Yesterday in the initial trades, this crucial support was challenged once again; but from nowhere, the strong buying emerged at lower levels in few heavyweight banking names, which pulled the index higher. In fact, it did not stop there, the lead got extended in the following hours to conclude comfortably at elevated levels. If we take a glance at intraday charts, yesterday's move appears to be completely opposite of Monday's fall and it is always good to see the market rising. As we had stated yesterday also, if any recovery has to happen it should happen from this important point only and markets managed to recover. Going ahead, 21027 remains a major support and till the time it is defended, there is no reason to worry for. For the coming session, a move beyond 21576 would extend the relief move towards 21750 - 22000 levels; whereas on the downside, the immediate intraday support lies at 21300 - 21200.
Nifty Bank Daily Chart
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