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Sensex (47949) / Nifty (14359)

Similar to previous Monday, yesterday too markets surprised everyone with a huge downside gap at the opening itself. It seems that we are completely decoupled with the global peers as the weak opening had nothing to do with the global cues. Since, we are battling with the mounting concerns over COVID-19 cases in our country, markets had a kneejerk reaction to this. In the initial trades, the selling augmented to challenge the 14200 mark this time. Fortunately, market saw some buying interest at lower levels as we did not spend much time below this key support. In fact, the recovery accelerated towards the fag end to trim some portion of losses to conclude the session tad above 14350.

Throughput the previous week, we maintained our cautious stance on the market and advocated against getting carried away by the recovery seen in the latter half of last week. Now, although we didn’t see any follow through selling yesterday, we would avoid going long till the time few key levels are not surpassed. For the coming session, 14450 – 14500 – 14560 are to be seen as intraday hurdles; whereas on the lower side, 14300 followed by 14200 are to be seen as key supports. Since the recent price correction phase is far different from the bear market falls, we are not seeing one way cracks in the market. Rather it’s behaving like a slow poison as it neither lets market sustain at higher levels nor corrects continuously. Hence, it is to be seen as the toughest phase for momentum traders, be its bulls or bears.

Nifty Daily Chart

Nifty Bank Outlook - (31208)

Similar to previous week, we began the week with a gap down opening and saw follow-up selling in the initial hour of trade to drag BankNifty towards 30400 mark. As the day progressed, index grinded at the lower levels for some time and then in last two hours decent recovery was seen to reclaim 31200 on the closing basis.

Throughout previous week, we advised to stay cautious as the banking index plunged below the much awaited support around the 89 EMA in the daily chart. However, we did see decent recovery but 32300-32400 acted as a strong resistance. Post gap down opening yesterday, we saw some recovery but the damage in the early morning was way severe. Hence, as long as we don’t see any sustainable up move beyond 32000-32200 traders are advised avoiding any aggressive bullish bets for the time being.

Nifty Bank Daily Chart

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