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Sensex (60979) / Nifty (18118)

Yesterday morning, the global set up was good and as a result, we had a promising start at the pivotal point of 18200. Finally, it appeared as if we are going to end this slumber phase; but the bulls once again failed to capitalize on this start. As the day progressed, we kept sliding gradually and at one point in the second half, even compromised with the intraday support of 18100. With some modest recovery at the end, Nifty ended the session precisely at Monday’s close.

It has been one of the longest period of consolidation for key indices within a slender range in recent years. Every now and then, market gives us hope of a breakout; but both counterparties are able to defend their territories. The excitement is creeping up now and more we spend time in this range, the possibility of a sharper move post the breakout (in either direction) is imminent. Let’s see what trigger makes it happen and would be interesting to see which way it unfolds. For the coming session, 18200 continues to act as immediate hurdles and only a breakout beyond the same, could trigger a short covering move.

On the flipside, 18050 – 18000 are likely to provide cushion in case of any intraday weakness in the market. Traders are advised to keep focusing on stock specific moves because they are the only one who are keeping traders engaged all the time.

Exhibit 1: Nifty Daily Chart

Nifty Bank Outlook (42733)

The Bank Index had a promising start to the session and during the first half an hour there was further traction on the upside. However, as the prices reached the key resistance levels there was a sudden drop in buying interest and then there was a gradual decline throughout the remaining part of the session that not only erased morning gains but ended with a loss of 0.21% at 42733.

In our yesterday's outlook, we mentioned a key hurdle around the descending trendline and for the momentum to trigger the said levels need to be breached. Yesterday, despite a strong start, price failed to give a breakout and hence the boredom continues. Now prices are back to key support around 42500 - 42400 which if broken on expiry day may trigger further weakness towards 42000. In our sense going with the recent trend, one should continue with the buying-on-dip approach but the real momentum would only trigger once prices give a sustained closing above 43000 - 43100 levels. We reiterate with less than a week left for the mega event of Budget, one should rather focus on a stock-centric approach that is likely to give outperforming opportunities.

Exhibit 2: Nifty Bank Daily Chart

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