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Sensex (59911) / Nifty (17707)

During the extended weekend, a couple of key quarterly result announcements missed the market estimates. And taking cues from there, the SGX Nifty indicated a weak opening; but to a surprise, Nifty started on a flat to positive note, courtesy of other key heavyweights. However, without wasting much time, we witnessed a sell-off in the morning session that marked an intra-day low of 17574. Fortunately, thereafter, a steady bounce was seen during the remaining part that recovered a major part of morning loss to eventually end a tad above 17700 with a loss of 0.68%

Our markets had a spectacular run during the last three weeks and post such moves, the indicators entered an overbought zone. In line with this, a profit booking session was on the cards, and this is exactly what we witnessed in yesterday’s session as prices ended the nine-day winning streak. Despite this, we remain optimistic and consider this a pullback move, as prices precisely defended the trend line breakout levels coinciding with 200 SMA on the daily chart. Going ahead, we sense prices may see some consolidation in the near term before the next leg of the run and hence the apt strategy would be to buy on dips and book profit at higher levels. As far as levels are concerned, we see sacrosanct support in the zone of 17500 – 17550, whereas 17800 – 17900 seems to be an immediate resistance zone.

The IT pack, especially the heavyweight stock INFY was the major culprit to jolt the market lower; however, the BFSI space continued to outperform and provide much-needed support. With the start of the result season, we may continue to see trending moves within counters and it is advisable to focus on such themes and movers that would give better trading opportunities.

Nifty Bank Outlook (42263)

The Banking index has started the session on a strong note taking cues from the robust earnings of HDFC Bank over the weekend. But soon after the opening bell, the sentiments turned ominous over the plunge in IT heavyweights and the Banking index slipped towards the 41800 odd zone. However, the bulls grabbed the opportunity and made a modest recovery throughout the rest of the trading hours and not only pared down the initial loss but led Bank Nifty to settle on a positive note, procuring 0.31 percent and settled a tad below 42300 levels. The ongoing price action construes a sturdy setup for the index and is highly anticipated to continue the same in a comparable period. At present, the 42000- 41800 zone is likely to cushion any blip, while the 41500 mark is expected to act as the sheet anchor. On the flip side, the fresh breakout has opened the potential for the index to march toward the psychological mark of 43000, before which 42600 could be seen as immediate resistance in the comparable period. The overall structure is buoyant, where any minor correction could be seen as an opportunity to add fresh longs in the index.

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