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Sensex (52589) / Nifty (15773)

Our markets started the day on a positive note and the index again approached the 15900 mark. However, around that recent swing high, we saw some tentativeness and a sell-off in the banking space in the last hour dragged the markets lower and Nifty ended the day marginally in the green.

Post the smart recovery from the lows on Monday, we saw a headstart opening in the indices yesterday. However, the banking index started to cool-off from its important resistance which then had an impact on the overall market in the later part of the day. We have managed to bounce from the support zone of 15500-15450, but now it is important for the benchmark to cross the swing high of 15900 for a continuation of the uptrend. The banking space seems to be playing a crucial role now and it could lead the market direction in the near term. Hence, it would be crucial to see whether the banking index makes a move to surpass its important hurdle of 35400 or not. Until then, it is better to stick to a stock specific approach and continue to avoid aggressive bets. The immediate supports for Nifty are placed around 15690 and 15600 while 15900 is the resistance.

Nifty Daily Chart

Nifty Bank Outlook - (34745)

Our markets had a pleasant start yesterday on the back of remarkable recovery seen in US bourses. Banking being the high beta space, gained more than a percent in the opening trade. However, the positivity stayed only till the first hour as we saw a continuous decline thereafter in the banking conglomerates. In fact with tail end correction, the banking index closed inside the negative territory.

Yesterday morning, the set up was just ideal for BANKNIFTY to go beyond the sturdy wall of 35400; but again it disappointed. Now due to yesterday’s correction, we can see it retracing almost 50% of the rally seen from Monday’s low. Hence it would be interesting to see how it behaves around the cluster of important supports at 34600 – 34400 – 34200. If it manages to hold, we may see some real strength in the banking index thereafter. On the other hand, any aberration around these key supports, would again drag the BANKNIFTY in the bearish territory.

Nifty Bank Daily Chart

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