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Sensex (59900) / Nifty (17859)

On Friday, we had a flat start however following the recent price action there was selling pressure that continued throughout the session. The selling augmented towards the fag end and in the process, we went on to slid below 17900 to eventually end the week with a cut of 1.36% against the previous week close.

The start was promising but the end was certainly disappointing for the opening week of the calendar year 2023. The benchmark index Nifty gave up all previous week’s gain and has closed around the lower end of the recent trading range. Now taking a glance at daily time frame chart, undoubtedly the price structure looks a bit weak and in fact, the price decline in last two sessions has certainly caught us on the wrong foot as we were not expecting Nifty to slide below the 18000 mark. Nevertheless, the recent low of 17750 would now be seen as a crucial pivotal point for our market. As of now, we are still a bit hopeful of recovery; but in case, if Nifty slides and sustains below 17750, we must prepare for extension of this corrective move towards 17600 – 17450 in coming week. On the flipside, in order to regain the strength, Nifty must reclaim 18000 first on a closing basis. The major trend deciding level remains at 18300, which would turn the tide once again in favor of bulls.

Nifty Bank Outlook (42189)

Bank Nifty had a steady start to the calendar year as prices climbed higher during the first two days of the week. This initial move was lethargic, but it seemed momentum would trigger to push prices towards all-time high levels. As the week progressed, we witnessed pressure in a few heavyweight counters that resulted in profit booking in the banking index. The correction extended towards the end to eventually end the week with a loss of 1.86% at 42189.

Technically, we can see prices forming a lower top around the 43500 levels and going ahead, the recent swing low around the 41500 would be a pivotal point as a sustained break below the same may open doors for further weakness. The said levels coincide with ‘89-EMA’ on the daily chart, which has historically acted as strong support. Hence, considering the oversold conditions on the hourly charts, we sense prices to hold the key support of 41500 as of now. However, one should avoid being complacent and should keep a close watch on how prices react around this key level.

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