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Sensex (55944) / Nifty (16635)

Markets opened higher for the third consecutive session and in the initial move, the Nifty even managed to clock fresh record high. However there was no enough strength to carry this momentum, this resulted in a sharp decline around the mid session. After this, market did stabilise but remained under pressure for the remaining part. Due to some modest recovery towards the end, the index closed marginally in the green.

Tuesday’s major driver banking space once again disappointed; because if that had not fallen from morning’s high, the Nifty would have been comfortably above 16700. Anyways, fortunately 16600 has now become a key support and looking at some wild swings yesterday, the expiry session is likely to see some higher volatility. As of now it does not appear as if we are going to slide below 16600 on the expiry day. So if any surprise has to come, we wish to have it in upward direction only. The immediate barrier remains at 16700 and if index manages to stay convincingly above it for nearly half an hour, we would see Nifty concluding the expiry on a pleasant note. Let’s see how things pan out today.

Nifty Daily Chart

Nifty Bank Outlook - (35586)

Post Tuesday’s spectacular run, we began yesterday’s session on a cheerful note and an uptick to touch 35900 in initial fifteen minutes of trade. However, this was soon sold off in the same hour to not only wipe out all the early morning gains but also felt in the negative trajectory. As we progressed, any attempt of recovery wasn’t strong enough to sustain at the opening levels and then post some consolidation in the latter half the banking index concluded the session with a cut of 0.35% to its previous close.

The kind of recovery we saw on Tuesday’s session looked as if we are out of wood and soon surpass the sturdy hurdle of 36200- 36300; but, in line to recent action the BankNifty once again proved to be a spoil spot. However, if we consider the bigger picture there isn’t any major damage to be worrisome. Until the banking index sustains above 35300-35400, we continue to be hopeful and would advocated avoiding any bearish bets. Now, it would be interesting to see today’s move being the expiry day as once can expect jump in volatility, in case of any dips towards the above mentioned support zone, intraday traders’ can opt to buy ATM calls.

Nifty Bank Daily Chart

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