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Sensex (60657) / Nifty (18043)

We started the session on a flat note yesterday with mildly negative bias. However, as the day progressed, market became nervous which resulted in a sustained selling across the board. With no major recovery, Nifty concluded the session at lowest point of the day convincingly below 18100 by shedding over a percent from the previous close.

Honestly speaking, looking at Tuesday’s close, most of the market participants must have been disappointed with yesterday’s correction. We were hoping for a breakout beyond 18300; but unfortunately, market had its own plans. Now, Nifty is approaching the lower band of the recent trading range of 18000 - 18300. It would be interesting to see whether we continue with the recent behavior of recovering from similar points. If we drift below 18000, then we may see some extended correction towards recent lows of 17900 – 17750, which will again turn out to a bit severe on individual stocks.

Nifty Bank Outlook (42959)

Bank Nifty as well started on a flat note and during the initial few minutes broke above the recent congestion phase. There was however no follow-up buying and as the day progressed Bank Nifty slipped lower throughout the session to eventually give up the last two sessions' gains and end a tad below 43000 with a cut of over a percent.

Yesterday during the first few minutes it seemed that prices have confirmed a bullish 'Inverse Head N Shoulder' pattern breakout seen on the hourly charts. However, it turned out to be a shakeout and the bulls camp was disappointed by this. Considering the recent price action, we continue to see prices trading in a range but with recent RSI smoothened buy signal we remain optimistic. Going ahead, key support is seen around 42600 - 42500 zone which is a confluence level around 50SMA whereas 43200 - 43500 remains a key hurdle zone. We sense, next directional move will only be seen on a range breakout beyond mentioned levels; till then traders should focus on stock specific approach, but one needs to be very selective.

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