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Sensex (38731) / Nifty (11642)
Wednesday’s spectacular recovery was followed by a flat opening with mildly positive bias. The index then continued its northward trajectory towards the 11800 mark. However, we witnessed massive profit taking at higher levels and hence, we were well off from the kissing distance of 11800. This sell off aggravated during the last hour of the day, which led index convincingly below 11700 within a blink of an eye. Eventually, this volatile session ended with a loss of over seven tenths of a percent.
We had an ideal start yesterday and very much on expected lines, index continued its march towards 11800. However, first technical and then derivative factor played out strongly in the market yesterday, leading to a strong intraday correction. Technically, if we look at the hourly chart, Nifty faced resistance precisely at the 78.6% Fibonacci retracement of the recent down move from 11856.15 to 11564.80. Adding to this, there was copy book ‘Shooting star’ was formed around this hurdle and hence, it weighed down heavily to initiate the profit booking mode. And then the expiry factor towards the fag end of the session, which dragged index significantly lower below its key intraday support. Honestly speaking, we did not expect this kind of bizarre session especially after Wednesday’s remarkable rally.
Now as far as levels are concerned, 11600 followed by 11549 would still be seen as major support zone. We reiterate that, till the time we are above 11549, there is no reason to worry for.
However, having said that, one need to be agile now and any unfavorable development below this support should be treated as an alarming sign for momentum traders. On the flipside, 11725 and 11800 are the immediate levels to watch out for. At present, traders are advised to stay light and keep following strict stop losses for existing positions
Nifty Bank Outlook - (29561)
The roller coaster ride continued on the day of F&O expiry. The Bank Nifty continued the positive momentum in the initial couple hours of the trade yesterday. However, as the day progressed, the index gave up the gains and ended the day with a loss of about 300 points.
In our yesterday's report, we had mentioned two resistance levels at 30050 and 30200. The index rallied higher up to the first resistance area and corrected sharply thereon. The volatility is expected to remain high and hence, traders should prefer to stay light and manage proper risk management on positions. The supports for the index are placed around 29435 and 29150 whereas resistances are seen around 30050 and 30200.
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