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Sensex (55107) / Nifty (16416)

Similar to previous session, we had a sluggish start convincingly below the 16500 mark as indicated by the SGX Nifty early in the morning. As the day progressed, the weakness extended a bit to sneak below the crucial support of 16400 around the midsession. Fortunately, the corrective move halted in the latter half and in fact with the help of a modest recovery in some of the heavyweights (especially banking), the Nifty managed to defend 16400 on a closing basis.

It’s been yet another day of boredom for our markets and it seems market participants are opting to be a bit cautious ahead of the RBI monetary policy slated in the forthcoming session. Hence, all eyes on the Governor now and let’s be hopeful, he manages to bring back the lost mojo in our markets. As far as levels are concerned, in the midst of sluggishness, the Nifty has managed to successfully defend the key support of 16400 on a closing basis and the way some of the banking heavyweights rebounded in last few minutes of trade, was certainly a bit encouraging

In case of any favourable outcome from the event, we may see Nifty reclaiming 16600 – 16700 levels; whereas on the flipside, any disappointment would lead to breach of crucial supports placed around 16400 – 16300.

Nifty Daily Chart

Nifty Bank Outlook - (34996)

Bank Nifty as well started on a negative note and with some in between bounce went on to mark an intraday low of 34834. Subsequently, with some bounce back from the penultimate hour the bank index ended with a loss of 0.89% tad below 35000.

Now we are lined up for the key event of RBI policy and the outcome will trigger the next directional move. Technically, if we see prices are retracing after the sharp rally seen from the May swing low and yesterday it exactly tested the 38.2% of the mentioned rally. Now if the outcome of the monetary policy is favorable then this is the ideal point to bounce back however if it disappoints then the next retracement of 50% is placed around 34500 that can be tested. On the higher side, immediate resistance is seen at 35500 and then at 35800. Traders are advised to keep a tab on the mentioned levels and trade accordingly.

Nifty Bank Daily Chart

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