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Sensex (49100) / Nifty (14529)

During the last week, Markets had a nervous start on Monday as we saw Nifty sliding below the key support of 14900 to even test sub14700 levels. However, at the midst of the week, we witnessed a vshaped recovery in the market post some dramatic events. Everything looked hunky dory as the February series ended convincingly above the 15000 mark. But market was not done with its twists yet as we saw a huge gap down on Friday on the back of weak global cues. The selling augmented as the day progressed to eventually mark biggest single day loss in last couple of months.

The one who follows ‘Technical Analysis’, gives more weightage to the price action and importantly it’s the closing point that matters the most than a starting or in between activity. If we relate this concept to the price action in the week gone by, we did see some healthy recovery at the midst; but all this positivity eventually went for a toss on Friday. Fortunately, we did not get carried away by the intra-week rally and waited for the convincing move beyond 15200 to change our stance. Market failed to surpass it and in fact, with a massive broad based sell off, Nifty has sneaked below its recent swing low of 14635.05 on a closing basis. This led to a confirmation of first sign of trend reversal in the form of ‘Lower Top Lower Bottom’ on the daily time frame chart. The weekly chart already showed some exhaustion in the previous week as we observed fatigue around the strong resistance zone of 15380 – 15500 (which is the 161% ‘Golden Ratio’ of the entire fall from Jan’20 highs to March’20 lows).

Nifty Daily Chart

Nifty Bank Outlook - (34804)

On Friday, Bank Nifty started with a gap down and remained under pressure throughout the session to end with a loss of 4.78% tad above 34800. In our last outlook, we had mentioned the mid-week bounce has resisted around the 78.6% retracement of the recent fall and with Friday's massive cut the bank index has now confirmed a lower top at the mentioned resistance as well has confirmed a lower bottom by breaking the recent low. The bears strongly grip the momentum, and we sense any bounce back is likely to get sold. As far as levels are concerned, 35200 - 35590 is the immediate resistance whereas, 34000 - 33800 is the next support to watch out for. With a spike in volatility, traders are advised to avoid aggressive bets and have a proper exit setup for any trades.

Nifty Bank Daily Chart

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