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Sensex (61561) / Nifty (18182)

Tuesday night, the US stock markets experienced significant pressure, leading to a mild negative opening for our markets as indicated by the SGX Nifty. The Nifty started off slowly and showed some composure around the 18300 level during the opening trade, suggesting the possibility of a bullish recovery. However, profit booking resumed as the day progressed, causing the Nifty to test levels around 18100. Eventually, there was some relief in the second half as a slight recovery occurred, resulting in the Nifty ending just below 18200 with a loss just above half a percent.

Over the past three weeks, our markets have witnessed an impressive surge. However, on Tuesday, after the formation of a Bearish Engulfing pattern on the daily chart and a Rising Channel on the hourly charts, tentativeness was visible. However, honestly speaking we did not expect the Nifty and BANKNIFTY to sneak below key supports of 18200 and 43700, respectively. The global dampness added to this sluggishness and hence, we saw extended correction during the first half itself. Despite this, we maintain our positive outlook and construe this as a running correction, as the broader markets continue to demonstrate strength. Yesterday, prices found support around the previous swing high (18135), technically this is termed as retesting the breakout levels which augurs well for the bulls.

Nifty Bank Outlook (43699)

The banking space started the day on a mild note and soon underwent a steep correction that plummeted the ongoing sentiments. However, in the penultimate hours, a modest recovery was seen from the intraday lows of 43450 odd levels, which pared down some of the lost grounds. Amidst the mixed trade, the banking index concluded the session a tad below 43700 levels, with a cut of nearly half a percent.

Technically, the pivotal support of 43500 proved its significance as the index witnessed a firm rebound post a mere breach. As we advance, the undertone is likely to remain on the bullish side as such corrections are considered healthy after the recent developments and also provide opportunities to re-enter in the space. At present, 43500-43450 is likely to act as strong support, followed by 43300 in the near period. While on the higher end, 44000-44150 is expected to act as a substantial hurdle for the index in the comparable period.

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