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Sensex (57065) / Nifty (16983)

We had a muted start for the day in the absence of any major trigger on the global as well as domestic front. Immediately, the bulls geared up to lift market higher in the initial trades. Within first one and a half hour of the session, Nifty was back to 17300 with handsome gains. However, the global peers became nervous all of a sudden which resulted in a complete nosedive in our markets too. Within no time, it not only erased all gains but also managed to send Nifty slightly below the 17000 mark. This was followed by some consolidation with mild recovery; but once again the tail end correction poured complete water on this attempt to conclude the session below 17000 for the first time after August 30, 2021.

The way market corrected sharply after testing 17300, is a clear sign of bearish trend and market participants are falling prey repeatedly to intraday recoveries. This is what we have been reiterating since last few days, one should avoid getting carried away by in between rebounds. In such kind of phase, traders should keep a watch on important resistance where they can either lighten up longs or create fresh shorts; but mostly, participants tend to find buying opportunity at supports which eventually becomes only a hope trade. We continue to remain cautious on the market and expect Monday’s low around 16800 to be breached soon.

On the flipside, 17150 – 17300 has now become a sturdy wall for the coming session. We reiterate, markets are likely to give multiple intraday bounce backs but it’s advisable not to get carried away with this. A lot of stocks seem to have entered an oversold territory but mind you, market never obliges such condition when it’s in a strong downtrend. Traders are advised to stay light as we expect the volatility to remain on the higher side.

Nifty Daily Chart

Nifty Bank Outlook - (35695)

As suggested by the global set-up, we began the session on a subdued note. The BankNifty gained strength right from the word go to rally beyond 36700 in the early morning trade; however, it couldn’t sustain for long as bear once again took charge to drag index below 35800. Post some consolidation in the midst, we saw yet another round of selling in the final hour to hit intraday lows of 35526.35 and finally concluded the day tad below 35700 with the cut of seventh tenth of the percent.

The banking index has been a major culprit in the recent fall and yesterday again we observed same pressure from this space. Technically speaking, the index has been hovering around the 200 SMA for second consecutive session which is an immediate support zone but considering the consistent underperformance we believe it may correct further. Hence, we maintain our cautious stance on market and would advocate avoiding any bottom fishing now. Going ahead, 36800-37000 remains a sturdy hurdle; whereas, any fall below 35300-35400 shall bring towards 34500-34600 zone.

Nifty Bank Daily Chart

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