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Sensex (59920) / Nifty (17874)

We had a soft opening yesterday on the back of some nervousness seen in major global peers. In fact in the initial hour itself, the weakness extended in some of the heavyweight pockets. This led to breach of 17900 first and then after a decent consolidation, Nifty went on to even test the 17800 mark. At the stroke of the penultimate hour, the expiry factor started playing out and this time it fortunately favoured the bulls as we witnessed a smart recovery towards the end to trim some portion of losses.

Market was quiet in last couple of sessions as it was trapped in a slender range. Yesterday it finally had some action but unfortunately it was dominated by the bears for the most part of the day. Percentage wise, it was not even a percent cut yesterday on a closing basis; but the more it fails to surpass 18100 – 18200, the harder it becomes for the bulls to maintain their grip on the market. In fact, it would be too early to comment on it; but we can clearly see a bearish formation of ‘Head and Shoulder’ being in process on the daily chart of Nifty. The neckline support is around 17700 – 17600, which if gets broken, we could see difficult days for market in the short run. With reference to our recent cautious stance on the market, we will not be surprised to see it breaking in the forthcoming week itself.

For the coming session, the immediate resistance is placed in the zone of 17950 – 18000. Traders are repeatedly advised not to create aggressive longs and even if one wants to follow stock specific moves, needs to be very selective.

Nifty Daily Chart

Nifty Bank Outlook - (38560)

Once again the Bank Nifty started on a weak note and on the weekly expiry it marked an intraday low of 38346. Eventually, with some minor bounce in the last hour it ended with a loss of 1.19% at 38560.

On the daily chart, the bank index has broken below a key trend line support and thus indicates further weakness going ahead. However, the current weakness has pushed prices towards the key 50SMA that has previously a couple of times have acted as strong support. Hence, it would be crucial to see if prices witness an immediate fall or if it bounces a bit before the second round of weakness. Whatever may be the case traders are advised not to get complacent on the bounce and use such bounce to lighten up long positions. As far as levels are concerned, support is placed around 38250 and 37900 whereas resistance is seen around 38900 and 39150 levels.

Nifty Bank Daily Chart

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