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Sensex (58807) / Nifty (17517)

In last couple of sessions, our markets have witnessed a remarkable recovery from sub-17000 territory. This positivity was carried over yesterday at the start as we witnessed a gap up opening with a small margin above 17500. However, in the initial hour, we witnessed a strong bout of profit booking to not only erase opening gains but also went on to slide below 17400. Fortunately the initial nerves settled down immediately which resulted in a complete recovery during the remaining part of the day to conclude the weekly expiry on a positive note tad above the 17500 mark.

Barring first couple of hours, there was not much action seen in market yesterday. In fact the kind of stock specific activity we witnessed in last two sessions, it was also missing barring few exceptions. So we would rather consider this as a muted weekly expiry. If we take a glance at the overall price movement in last 7 – 8 sessions, markets has been gyrating in a slightly wider range where both ends got tested with immense volatility. So market has decided to take some breather after nearing the cluster of resistance i.e. 17500 – 17600 – 17700.

Directionally, we are still a bit skeptical whether market has enough strength to surpass the higher boundary of this range. Hence, one needs to now start lightening up longs if Nifty extends the relief move in the coming session. On the flipside, 17400 followed by 17300 are to be seen as key supports.

Nifty Daily Chart

Nifty Bank Outlook - (37082)

Bank Nifty started on a mild positive note yesterday however it lacked follow-up buying and then it slipped lower to mark an intraday low of 36884. Subsequently, some bounce back was seen that was followed by consolidation for the remaining part of the day to eventually end with a loss of 0.54% at 37082.

Yesterday, Bank Nifty underperformed as compared to the benchmark index however it managed to hold on to the bullish gap left on Wednesday. This gap can be termed as a bullish island reversal gap and as long it holds there is a possibility of extension of this upmove in the near term. In such a scenario, 37800 – 38000 is the stiff barrier on the higher side. On the flip side, the lower side of the gap is placed at 36820 and if its breached on a closing basis then it can trigger weakness to push prices back towards 36000 levels. Traders are advised to keep a tab these crucial levels and trader accordingly.

Nifty Bank Daily Chart

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