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Sensex (49008) / Nifty (14507)

The previous Friday’s sharp recovery was followed by a flat to positive start on Monday, owing to favourable global cues. The lead extended on the following session after the Supreme Court’s verdict on Loan Moratorium. However as we alluded to in the intra-week commentary, the conviction was clearly lacking in the up move, which eventually resulted in a sharp decline thereafter. Due to mid-week sell off, the Nifty went on to enter sub-14300 territory for the first time after the Budget session. However, similar to the previous week, this Friday too brought some positivity back in to the market as we witnessed a decent recovery across the board to reclaim the 14500 on a weekly closing basis.

After the recent consolidation, the market finally started feeling some heat as we witnessed in the week gone by. Fortunately we remained a bit adamant and did not get carried away by the in between upswings. We continue to remain cautious and the way we are placed on the charts, further correction cannot be ruled out. As far as levels are concerned, the next key support is visible in the zone of 14140 – 14000 as it coincides with the daily ’89 EMA’ and the 78.6% retracement of the up move from 13596.75 to record high of 15431.75. Before this, 14400 – 14250 are to be seen as immediate supports. On the upside, the cluster of resistances is visible at every 100-150 points. So, for this truncated week, 14600 – 14750 – 14900 are to be seen as pain points for the Nifty. Till the time, 14900 is not surpassed with some authority, the short term trend remains bearish and hence, it’s better not to get complacent.

Nifty Daily Chart

Nifty Bank Outlook - (33318)

Post Thursday’s smart recovery precisely from 89 EMA in daily chart, we started-off Friday’s session on an optimistic note tad above 33600. But, the follow-up buying was really missing and hence BankNifty began to shed the early morning gains from the word go. As the day progressed, we hardly saw any relevant price action, the banking index consolidated in the range of merely 400 points for remaining part of the day. Eventually, we concluded the day almost a percent higher to its previous close. If we consider the overall activity for the week, the BankNifty corrected inline to our expectation and also tested 89 EMA on daily chart on Thursday. On the same day, sharp recovery was seen from the important support zone; which is certainly a positive indication for Bull’s. Hence, it is now important to wait for the followup activity in this week. For Traders, it is advisable to avoid any aggressive directional bets for the time being. As far as levels are concerned, 33500-33600 should be acting as immediate hurdles; whereas, around Thursday’s lows (32415.25) is the demand zone.

Nifty Bank Daily Chart

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