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Sensex (60029) / Nifty (17889)

Our benchmark index had a gap up opening with a small margin despite SGX was indicating a sluggish start. In the initial trade, Nifty tested the 18000 mark but was unable to sustain above it. Due to modest selling in some of the heavyweights, Nifty gradually corrected in the first half and then slipped into a consolidation mode to end the range bound session with nearly two tenths of a percent cut.

The Diwali festival is around the corner and it appears as if the market is in no hurry to give any major move ahead of it. Generally markets do not correct around this festive time, but since we had a rough week last week and slid below key support of 18100 – 18000, market is finding a bit difficult to stay at higher levels. Fortunately the banking space remained firm throughout the day, which provided some helping hand to the benchmark index. If that had not the case, Nifty would have probably knocked the doors at 17800. For the coming session, we expect the range bound move to continue where 17950 – 18000 are likely to act as immediate hurdles and on the lower side, 17800 – 17700 are to be seen as key supports.

Traders are advised not to trade aggressively in index and in case of a recovery towards the mentioned resistance zone of 18000 – 18100, one should lighten up existing longs. Also all eyes would be on BANKNIFTY, because if Nifty has to reclaim these levels, it needs to continue its upwards trajectory with some intent. One needs to focus on individual stocks; but needs to be very selective because only few counters are likely to do well in such kind of lethargic mood.

Nifty Daily Chart

Nifty Bank Outlook - (39938)

The banking index had a slightly positive start and maintained its positive posture almost for the entire day. However, we hardly saw any major price action as index preferred hovering around the magical figure of 40000 to concluded with the gains of 0.44% to previous day’s close.

We continue to see decent recovery from sub 38500 for third consecutive session to almost reclaim 40000. Though, we are experiencing some nervousness as we enter into the vicinity of 40000. The banking index stood firm despite the benchmark index witnessed some selling pressure at higher levels and is also trading above the 20 DEMA. Going ahead, it would be interesting to see the follow-up from hereon as it may certainly dictate the move for Nifty. As far as levels are concerned, 40000-42000 remains a sturdy hurdle and support is now placed around 39400-39500 zone.

Nifty Bank Daily Chart

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