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Sensex (59190) / Nifty (17646)

Despite global markets indicating some nervousness, our markets surprised everyone with a positive start. For the first half an hour, index consolidated a bit but then we witnessed some correction to slide below 17800. The bulls were not going to give up so easily as we witnessed a complete recovery to retest morning highs in the first half itself. However, globally things started to worsen a bit which resulted in a sharp decline in our market throughout the second half to conclude tad below 17650.

Market was divided into two parts yesterday. First one belonged to the mighty bulls but during the latter half, the weakness was clearly visible. Going by the recent behaviour of the market, the declining move do not last for more than 1 or 2 days. But looking at the broad based profit booking yesterday, it would be interesting to see whether markets stick to their recent pattern or it finally starts giving some extended correction. We continue to remain cautious and do not expect Nifty to cross the sturdy wall of 17900 – 17950 soon.

For today’s session, all eyes on global development; because any further aberration on that front, would finally validate our recent stance. As far as levels are concerned, 17500 – 17450 would be seen as crucial supports. A violation of lower range would be seen as first sign of weakness. Before the recent highs, 17750 – 17850 are to be treated as immediate resistances and the way things panned out yesterday, any bounce towards these levels is likely to get sold into. We expect the volatility to remain on the higher side and hence traders are advised not to trade with aggressive bets.

Nifty Daily Chart

Nifty Bank Outlook - (37522)3

We has a gap up opening yesterday and within no time we entered 38000 plus levels. Subsequently, the banking index failed to sustain and we saw sharp sell-off during the latter part of the day to drag index near 37450 mark. Finally, we concluded the volatile day with a cut of sixth tenth of a percent to previous close.

The banking index failed to keep up the momentum as it approaches 38000 plus zone and the kind of selling we saw it seems like bears are forming strong grip now. However, the fall seen in banking index wasn’t like in case of Nifty. Going ahead, 38000-38200 remains a strong supply zone and any further selling below 37300- 37400 shall be a sign of weakness. Traders are advised to lighter up the longs if any and should avoid any leveraged positions as volatility may head north.

Nifty Bank Daily Chart

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