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Sensex (57527) / Nifty (16945)

On Friday, our markets started on a weak note and then the sell-off aggravated post the midsession, courtesy to news flow regarding Government’s ‘Securities Transaction Tax (STT)’ on selling of Futures and Options which created some tumult towards the fag end of the session. Adding to this, the weak start in European bourses dragged Nifty below 17000 to mark lowest weekly close in last seven months.

There’s still no respite for the bulls as any intermediate bounce is getting sold into and prices continue to move in a lower top-lower bottom formation. Globally, the mounting concerns over a few banks and now domestically, the hiking of STT has dampened the market sentiment. The market is currently oversold, but such financial issues can be very disruptive at times. Hence, traders should ideally avoid aggressive bets for a while. From a technical point of view, we are not too far from the sacrosanct support zone of 16850 - 16800, which coincides with the September month swing low and 89-weekly EMA. We continue to remain hopeful but at the same time for momentum traders, it’s better to wait for some price confirmation once all this negativity subsides on global as well as domestic front.

On the higher side, 17200-17250 has been acting as a sturdy wall and the bulls desperately need a convincing breakout beyond this to make a comeback. The volatility is likely to be on the higher side and the apt strategy would be to keep a close eye on global developments and take one step at a time. In case of relief, traders can find ample opportunities in the beaten spaces and for investors, this decline would provide opportunity to accumulate quality stocks in a staggered manner.

Nifty Bank Outlook (39395)

The Bank Nifty index witnessed a lackluster week of trade wherein it kept flirting near the 200-day SMA. The lack of follow-up buying was evident, which poured water on the initial gains of the week and led the index to settle in negative terrain for the third consecutive week. The Bank Nifty shed 0.51 percent from its previous week’s closure and dropped a tad below the 39400 level.

Technically, the index is not being able to sustain at the higher levels, which certainly portrays tentativeness among participants amid the ongoing global concerns. Also, the index is struggling below its 200 SMA and requires some trigger to come out from the slumber phase. As far as levels are concerned, the 39000 mark is likely to cushion any short-term blip, while the sacrosanct support lies around the recent swing low of the 38600-odd zone.

On the higher end, an authoritative closure above 40000 could only trigger some thrust in the primary trend, and the index could surge towards the next hurdle of the bearish gap placed around the 40840-41200 zone in the comparable period. Hence, one needs to keep a close tab on the mentioned levels and avoid aggressive trade till the trend gets clear.

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