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Sensex (58099) / Nifty (17327)

During the last week, our markets started on a mild note taking cues from the weak global markets, but the dip augured well for the bulls as the Nifty witnessed two consecutive days of positive closure. As the week progressed, our markets seemed tentative at the higher grounds, and the weakness in the global markets eventually dragged the indices lower by the weekend. The benchmark index witnessed a correction consecutively for the second week and ended the session a tad above 17300 with a cut of over 1.16 percent to the previous week’s close.

Technically speaking, the last session of correction has dampened the overall sentiments as the significant support of the unfilled gap got breached decisively, implying strong momentum in the sell-off. The weakness in the global markets and the upcoming key domestic data have put a sense of tentativeness among the market participants. As we have witnessed a decisive breach below the major support zone in Nifty, one should not rule out the possibility of it testing the immediate swing low of 17150 odd zone, while the sacrosanct support lies at the psychological mark of 17000. On the flip side, a series of resistances could be seen starting from 17500 to 17800 in the comparable period.

Nifty Bank Outlook (39546

The banking space has snapped the four weeks of the consecutive winning streak and witnessed an underperformance to the benchmark index. The banking index has plunged over 3 percent in the entire week and has dampened the overall sentiments. Eventually, the Bank Nifty settled below the 40000 mark with a cut of 2.67 percent in the last trading session.

We allude to the previous week’s commentary where we stated the formation of a ‘Shooting Star’ in the Bank Nifty index at the highs, which has played well in favor of the bears. At the current juncture, wherein the index has slipped from the lifetime high zone post a vertical rally, one should not rule out the possibility of further correction in the comparable period. As far as levels are concerned, the unfilled gap of 38400-38470 odd zone is to be considered vital support levels. A weekly close below this would certainly damage the ongoing bullish structure. On the flip side, we may witness a series of resistances starting from 40500-41500, and until we witness a decisive breach above the 41800 zone, a rangebound move could be seen in the near future.

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