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Sensex (52276) / Nifty (15740)

Nifty started the session marginally positive but it corrected from the opening level and entered sub 15700 in the first hour of the trade. However, the index then recovered from its lows and ended the day marginally in the red around 15740.

The index is trading around its resistance of 15770-15800 which we had mentioned about in yesterday's market outlook. Nifty corrected initially led by the banking space but once again, the ‘20 EMA’ on the hourly chart provided support to the index and it recovered gradually from that support. The market breadth continued to remain positive, however, a lot of sector rotation was seen yesterday since the banking space took a backseat. The defensive sectors witnessed buying interest with IT leading the momentum in the morning trade, then some FMCG stock witnessed interest and at the end, the Pharma stocks made a comeback. This indicates that while the uptrend continues, some time correction/consolidation at the crucial juncture is seen and the momentum seems to be shifting to the above mentioned sectors. As far as levels are concerned, the immediate supports are placed around 15670 and 15600 while resistance is seen in the range of 15770-15800. A move above 15800 would then lead to a resumption of momentum in the index towards 16000

Looking at the change of momentum between the sectors, traders are advised to focus on stock specific trades from the mentioned sectors where we could see some relative out performance in the next couple of sessions.

Nifty Daily Chart

Nifty Bank Outlook - (35085)

Our benchmark started slightly positive yesterday; whereas the banking index opened flat. This divergence broadened as the day progressed as we saw BANKNIFTY having a sharp cut whilst the Nifty had a small decline in the first half. In fact to surprise, we witnessed benchmark recouping all losses at the close but banking index failed to participate in the recovery. Eventually, it ended the session tad above the 35000 mark by shedding nearly a percent

Since last few days, the financial space is not moving at all and yesterday it showed first sign of weakness. Although there is not much damage done yet, 34960 – 34900 is to be seen as a crucial intraday support zone. If we see it sliding and sustaining below this junction, we could see this profit booking extended towards 34700 – 34500. Hence, it would be important for it to hold this support first and then reclaiming its position above 35200 – 35300 in order to trigger some positivity. In this case, we can see a pleasant day to retest 35500 – 35700 levels. Considering these observations, the coming session is expected to be an interesting one.

Nifty Bank Daily Chart

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