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Sensex (57145) / Nifty (17016)

Our market tumbled over the rising concerns of weakening INR and the ongoing global correction. At the very start of the week, the key indices tested the crucial support levels, implying the spread of timidity in the overall market space. The benchmark index Nifty50 witnessed a gap down opening that further aggravated and dragged it below the psychological mark of 17000. However, post the hustles in yesterday’s session, the index managed to settle the day a tad above 17000 levels, with a cut of 1.80 percent.

Recently, we managed to decouple with the global peers, but in the last couple of sessions, our markets finally surrendered to the global sell-off. Although we are back to the psychological level of 17000 in a flash, our broader structure still looks quite robust as compared to the US markets. Hence, we advise traders not to get baffled by this sharp decline and to remain firm. The benchmark index Nifty has now entered a cluster of key moving averages i.e. 89-day EMA and 200-day SMA. Also, the previous breakout point coincides around 16800; hence, as of now, we do not expect the correction to extend below these levels. If it gets breached, we may have to revisit our view; but as of now, we would like to believe we are very much close to the sacrosanct supports, and since markets are extremely oversold, it’s advisable to trim existing shorts and start nibbling into quality propositions.

Nifty Bank Outlook (38616)

The BANKNIFTY started the week lower in tandem with benchmark index. After a small recovery in the initial trades, the selling resumed at higher levels and as the day progressed, it got bigger. As a result, the BANKNIFTY registered yet another awful session by shedding over a couple of percent from Friday’s close.

In last couple of sessions, the recent rally contributors got hit badly and banking is clearly one of them. Now, we can see banking index entering a cluster of supports placed at 38400- 38200-38000. Hence, the short sellers need to be a little watchful here. We reckon it’s better to lighten up shorts and look to take a contradictory punt as we can see lot of indicators suggesting a possible rebound anytime soon. However since the global environment is not so conducive, it’s advisable not to get complacent at higher levels, till the time 40000 is not reclaimed on a closing basis. On an immediate basis, 38900-39200 are to be seen as intraday hurdles.

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