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Sensex (60719) / Nifty (18109)

We had an excellent start to the week owing to favourable global cues. However, markets failed to sustain at higher as the early morning gains just disappeared during the first half itself. During the remaining part of the day, Nifty kept flirting around the equilibrium point. Eventually in the absence of any momentum, Nifty ended the session tad above the 18100 mark.

Friday’s action packed day was followed by quiet session yesterday, where Nifty saw some encouraging signs at the start but could not capitalise on it. The overall intraday range for Nifty was merely 130 points approx. This itself suggests lack of momentum in key indices. However, there was some action seen in defensive names like FMCG and PHARMA. Apart from this, there was a complete drought in most of the individual pockets. Since Nifty remained in a slender range, levels are more or less unchanged. For the coming session, 18200 would be seen as immediate hurdle; whereas on the lower side, 18000 followed by 17850 are to be considered as key supports. Because any violation of these levels would lead to some weakness in our benchmark index.

Nifty Daily Chart

Nifty Bank Outlook - (38702)

Global market were hinting a positive start for the week and as per the expectation the banking index to opened with some strength. The index witnessed a follow-up move towards 39100 but soon this got wiped-off, the selling aggravated in the subsequent hour to hit intraday lows of 38606.60. In absence of any major price action thereafter, the BankNifty ended the session with marginally loss.

Post last week’s sell-off, we are witnessing some respite but we can clearly see some nervousness as index approaches the resistance zone of 39000-39200. The banking index has been clearly underperforming lately and is trading below 20 DEMA unlike the Nifty which is above the same moving average. The PSU banks which were in action have also undergone some profit booking with the privative bank which has been correcting lately. Considering yesterday’s move, we stick to our cautious stance especially in this space and would advise avoiding any aggressive bets until we sustain below 39200-39300. On the downside, 38300-38400 shall be looked as immediate support zone and any fall below same may drag index towards next support zone which is around the 89 EMA.

Nifty Bank Daily Chart

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