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Sensex (49751) / Nifty (14708)

The global picture changed a bit between Monday’s close and yesterday’s open. The Dow future was trading deeply in red on Monday while we closed; but after this there was a v-shaped recovery seen in their market and the optimism continued yesterday early morning as well. Taking such strong cues into the consideration, our markets had a surprising bump up at the opening convincingly beyond 14700. After the initial hiccup, the Nifty started rebounding sharply to test the 14850 mark. However, since the market is in a profit booking mode , it failed to sustain at higher levels. As a result, the Nifty gave up major chunk of its gains to conclude with nominal gains above 14700.

After Monday’s hammering, our market rebounded sharply in the first half yesterday; because the prices were a bit oversold which was then supported by the global recovery. However, it failed to sustain at higher levels as we saw individual pockets once again started feeling the heat. If we meticulously observe yesterday’s high, it precisely coincided with the ’20-day EMA’ and hence, acted as a sturdy wall. Going ahead, till the time Nifty doesn’t go beyond 14900 – 15000, the short term momentum is likely to be on the downside. Hence, traders are continuously advised to use intraday recoveries to lighten up longs. The immediate resistance zone remains at 14775 – 14850; whereas 14665 followed by 14635 are to be seen as key supports. The way Nifty is shaped up, we will not be surprised to see Nifty sliding below these supports soon to test 14570 – 14470 levels.

Nifty Daily Chart

Nifty Bank Outlook - (35117)

Bank Nifty as well started on a positive note and after an initial extension of bounce, the bank index slipped lower. Subsequently, the bank index remained in a range for the second half and eventually ended with a loss of 0.40% at 35117.

While on Monday, the bank index showed some relative outperformance it yesterday underperformed. On the daily chart, the bank nifty is currently hovering around the support of 20SMA at 35000 levels and for the last two sessions have managed to hold it on a closing basis. Going ahead, a sustained break below this support can trigger the next leg of downside towards 34350 - 34000 levels. On the flip side, 35500 - 35680 can be seen as immediate resistance, and only above the same we can expect a decent bounce back; till then traders are advised to use every intermediate bounce to exit long positions.

Nifty Bank Daily Chart

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