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Sensex (56789) / Nifty (16887)

The global developments over the weekend continues to remain depressing and hence, SGX Nifty was indicating a gap down opening with a fair margin. Surprisingly, our markets started the week with marginal gains by completely shrugging off unfavorable global cues. However, we failed to capitalize on this promising start, because things had to come to an equilibrium and hence, withing few minutes, Nifty normalized to below 16950 levels to match with SGX Nifty. Around the mid-session, we did attempt for a recovery but sell off in some of the index constituents weighed down heavily in the latter half. Eventually, Nifty concluded the session tad below 16900 by shedding over a percent.

After Friday’s spectacular session, market participants certainly did not expect for this weakness; but globally there is no end to these mishaps. As an optimist, we must accept the fact that we are still outperforming most of the developed global markets and we remain hopeful of seeing some brighter days in the near term. As far as levels are concerned, 16800 – 16750 are to be considered as immediate supports and if there is no aberration globally, we may see our markets defending this sacrosanct zone.

Nifty Bank Outlook (38030)

Unlike the benchmark, Bank Nifty started on a negative note and without any major bounce back it continued to slip lower to end the inaugural day of the week with a cut of 1.56% tad above 38000 levels.

The way the bank index bounced back on Friday from key levels; it was quite disappointing to see a lack of follow-up buying and in fact, there was weakness in yesterday's session. The bullish engulfing pattern seen on Friday however remains intact and as long the low of the pattern holds, there is a strong possibility of buying emerging from lower levels. We are seeing a key 89EMA support near around, and hence we reiterate avoiding short bets. Also, the global woes continue to be a big factor, and hence ahead of the mid-week holiday it would be advisable to avoid carrying aggressive bets overnight. As far as levels are concerned, immediate support is placed at 37800 and 37300 whereas resistance is seen around 38500 - 38800 levels.

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