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Sensex (64831) / Nifty (19254)

On the day of monthly expiry, Nifty began with a slight positive trend. However, as the day unfolded, prices gradually declined, and any attempts of intraday recovery were met with selling pressure. Towards the fag end, there was some respite from the bulls, but ultimately, prices concluded with a cut of 0.48%, just above the 19250 level.

The August series ended the four-month winning streak as the contract ended with a cut of more than 2% for the benchmark index. Looking at the daily chart, the prices throughout August exhibited a corrective phase characterized by time-wise consolidation within a very narrow range. This consolidation is depicted on the hourly chart as a 'Falling Channel' pattern, with prices now ending a tad above the lower boundary of this pattern. An intriguing observation is the presence of a 'Three Point Positive Divergence' in the RSI Smoothened oscillator on the hourly chart, potentially signaling a bullish turnaround. Therefore, in the upcoming session, the support levels around 19170 – 19200 are crucial. A breach of this support might lead to further weakness, targeting levels around 19050 – 19000 in the near term. Conversely, if prices manage to hold above the mentioned support, it could indicate the continuation of the channel pattern, with a possible re-test of the upper boundary around 19500. Prior to that, the levels of 19380 – 19400 would pose as immediate resistance. The broad-based rally would trigger only once 19500 is broken with authority.

Nifty Bank Outlook (43989)

After a discouraging session on Wednesday, the monthly expiry session began cautiously for Bank Nifty. However, some buying at open did push the index higher but following the norm wherein sellers have utilised higher prices to stamp their authority. Yesterday also we witnessed early gains post open, taper out gradually with Bank Nifty closing the day with cuts of about five-tenths of a percent below the crucial psychological level of 44000.

With yesterday’s close, Bank Nifty like the benchmark index has halted its 4-month winning streak. But technically speaking, there is no alteration yet in the overall structure of the index as it is still inside its tight trading range. Even looking at the hourly chart, the index continues to hover around in a channel that it has been in for quite some time now. The index which has come under severe pain for last two trading sessions, is now close to the lower end of its trading range and a response from buyers can be anticipated while the ball is in their court. As mentioned earlier, this constant struggle to hold on to higher levels, does not augur well for Bank Nifty. The levels of 44800-45000 continue to act as a very strong hurdle, and on the downside the levels of 43800-44000 are a zone to look for buying interest.

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