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Sensex (59806) / Nifty (17590)

Our markets witnessed a marginally positive opening, however right from the word go prices started to slide lower forming an open high kind of scenario. During the midst, there was a mild bounce back that was inferior to the Bank Nifty. Eventually, this bounce as well got sold into as one more round of profit booking resulted in Nifty ending below 17600 with a loss of around nine-tenths of a percent.

It was a disappointing session for the bulls as, despite some recent positive developments, the markets are lacking sustenance at higher levels. The culprit remains heavyweights, as one or the another from them continues to comfort in the back seat; yesterday the major draggers were Reliance and Auto counters. Nifty has now given up initial weekly gains and is now placed at a neutral juncture. Going ahead, 17500 followed by 200SMA placed at 17430 would be considered sacrosanct support and we remain hopeful that buying will re-emerge at lower levels. However, since we are not seeing follow-up buying traders need to avoid undue risk and need to be very fussy in their stock selection.

Nifty Bank Outlook (41257)

Post Wednesday’s strong close, we began the weekly expiry session above 41500 and saw follow-up buying to head towards 41650. However, like Monday’s session some tentativeness was observed at higher levels which got aggravated as we progressed to drag the banking index towards 41200. Eventually, we concluded the day with a cut of 0.77% to the previous day’s close

If we look back in the February series, specifically in the midst, the banking index spent almost two weeks in the vicinity of 41000- 42000 and now it’s the third week wherein the index is hovering around the same zone. Considering the broader picture, we have managed to conclude the session above the support zone of 41000-41200 and above the rising trendline support mentioned in the previous commentary. Hence, as long we manage to sustain above key supports, we would use such dips to add longs in the market. On the upside, considering the recent price action, 41600- 41700 remains a sturdy wall followed by 42000. Traders are advised to keep a close tab on the above-mentioned levels and avoid any positional bearish trades.

On the flip side, the 61.8% retracement level (17800) that we have been highlighting since the last couple of sessions remains a stiff resistance, and for the trend to technically turn into positive need to close above it with some authority; before that 17700 should also be considered as immediate resistance. The banking space remains a key ray of hope for the bulls as the bank index continues to show resilience and has been well sustained above the recent bullish breakout levels. Also, one needs to keep a tab on global developments as some positive developments there could trigger optimism back in our markets.

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