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Sensex (58766) / Nifty (17532)

With last week’s price action, Nifty has finally snapped its recent winning streak as it ended with nearly couple of percent cut. Although, this week so far, Nifty came off a bit from its all-time highs, the September month panned out extremely well for the bulls as they added nearly 3% (month on month) to their kitty. Honestly for the second half of the September month, we maintained a cautious stance on the market and it moved much more than we had expected. In such kind of strong Bull Run, it may not be a wise ploy to stay sceptical; but the kind of time-projections and negative divergence in momentum oscillators we are observing, we would continue with the same. The over stretched market can surprise us any time and hence we reiterate staying light in the market. We have already witnessed a glimpse of this possibility last week, but structurally nothing has been dented yet.

As far as levels are concerned, the upside for this week seems capped and we do not expect the Nifty to go beyond the sturdy wall of 17800 – 17950. On the flip side, 17450 – 17300 are to be seen as key supports. First sign of weakness would be visible only after breaking this lower range.

In addition, the fear index INDIA VIX also spiked up a bit during the first half of the last week. Hence, we expect the volatility to remain on the higher side in this week as well. We advise traders to stay light and follow strict stop losses for existing positions. Also, we are observing good stock specific action in the market. One can continue following it but try to book timely profits as well.

Nifty Daily Chart

Nifty Bank Outlook - (37226)

On Friday, Bank Nifty started with a gap down opening however post that the it gradually moved higher and recovered most of it lost ground. The Bank Index eventually ended around the high point of the day with a cut of around half a percent at 37226.

During the week gone by, we again witnessed a false breakout in the Bank Nifty as it failed to impress after closing above the 38000 levels. The lack of follow up buying at higher levels dragged it towards the support levels on Friday and that has interestingly got defended again. Now going ahead, we will closely watch the 37000 – 36800 levels as next leg of weakness can only be seen if prices sustain below it. On the flip side, incase of any bounce we will closely watch 37600 – 37800 levels. Traders are advised to continue focus on stock specific trades that are providing better trading opportunities.

Nifty Bank Daily Chart

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