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Sensex (57200) / Nifty (17102)

On Friday, Nifty started on a positive note and the recovery extended towards 17400; but unfortunately, the indecisive traders chose to take some money off the table. In the process, Nifty surrendered all gains to close on a flat note.

Till the time, the global uncertainty do not disappear, we are likely to have challenging markets where the volatility remains on the higher side. Now the mega event of budget is lined up and hence, we do not expect any decisive move (on either side) today. Technically speaking, 16800 is considered to be a crucial level because it coincides with the 78.6% retracement of the recent up move as well as the trend line support. Market has not only managed to hold it in last couple of sessions but also had an excellent recovery to reclaim 17000 with some authority. Hence, as long as this support holds, we remain hopeful for some recovery from hereon. On the flip side, if market manages to recover, we don’t see it surpassing the sturdy wall of 17350 – 17500 before the budget. Whatever breakout has to happen (upwards or downwards), it is now likely to happen on or after the budget only. Till then one should expect a range bound movement and should focus on stock specific action.

Nifty Daily Chart

Nifty Bank Outlook - (37689)

The banking sector has seen huge volatility in the last week, wherein the range for the index has expanded to over 2000 points. Despite this volatility, the index settled the week on a muted note with mere gains of 0.31 percent at 37,689.40 levels but has significantly outperformed the benchmark index Nifty50.

On the technical front, the banking index has managed to sustain above the major exponential moving averages on the daily time frame, suggesting the strength to remain intact in the counter. The index is expected to stay upstream, until the 37000 mark is being held and any minor decline could be bought in. On the higher end, a stiff resistance is placed around the zone of 38800-38900 and until it is not breached decisively, the mentioned range-bound movement could be seen in the index. Considering the eventful week of budget and the technical setup of the index, it is advisable to stay cautious and restrain from any heavy leverage positions. Also, to be selective as volatility is likely to remain higher.

Nifty Bank Daily Chart

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