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Sensex (51329) / Nifty (15109)

Nifty started the day marginally positive and crept higher to surpass 15250 level. However, we witnessed some profit booking in the last hour of the day due to which Nifty gave up its intraday gains and ended the day on a flat note.

The markets continued its positive momentum in the first hour of the trade yesterday. However, as the day progressed, the stock specific momentum witnessed some sluggishness which resulted in profit booking at the end.

The Nifty has resistance in the range of 15250- 15300 while the Banking index too is facing some resistance around 36600 mark since last three sessions. Thus, it is necessary to surpass these respective levels for a continuation of the up move. However, since we have seen a sharp run up post budget without any correction, some consolidation or a correction would be healthy to set up the next leg of upmove.

Yesterday’s low around 15060 is around the hourly ‘20 EMA’ which is an important short term support. In case the index breaches this, then some more correction upto 14870-14900 cannot be ruled out. On the flipside, a move above the mentioned range of 15250-15300 would mean a continuation of the trend.

Although the broader trend continues to be positive, it would be prudent to book timely profit and look for buying opportunities in stocks again on dips. It is advisable to avoid aggressive positions and take a stock specific approach with a tab on the above mentioned levels.

Nifty Daily Chart

Nifty Bank Outlook - (36056)

The banking index too opened higher in tandem with the benchmark this morning. In the initial hour, the banking stocks looked a bit tentative and hence, we witnessed BANKNIFTY immediately sliding inside the negative territory. However, the buying emerged at lower levels across banking space, resulting in a smart recovery to regain the positive terrain.

For the major part of the session, banking index traded firmly inside the green. The action was not done yet as we saw sharp sell-off across the broader market at the stroke of the penultimate hour. In this process, constituents came off sharply to erase all gains and eventually the BANKNIFTY managed to close with marginal gains; courtesy to a modest recovery at the end.

To summarize, it was a roller coaster day for the market so as the banking space. Since last couple of sessions, the undertone has been strongly bullish but somehow BANKNIFTY is unable to go beyond Friday’s high of 36615. This level is important because it’s a high of the ‘Gravestone Doji’ pattern and hence, till the time it’s not crossed convincingly, we are likely to see some supply at higher levels.

Fortunately, it’s been successfully defending its lowest point as well, which is to be seen as a crucial level. We continue to remain cautious till the time this above mentioned pattern is not negated. On the higher side, 36400 – 36615 are the levels to watch; whereas on the lower side, 35750 – 35500 should be seen as immediate supports. A move below 35500 should be treated as a short term reversal of the trend and hence, traders should then avoid creating aggressive longs in banking index.

Nifty Bank Daily Chart

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