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Sensex (52847) / Nifty (15774)

The weak macro factors over the rising inflation and the upcoming Fed policy have created havoc in the global equity market. The repercussions were also seen in our equity space, which started the week on a fragile note with an initial gap down of nearly 2 percent, that got aggravated as the day progressed. The timidness across participants was evident as the market did not showcase any sign of reversal or strength at the lower levels. Finally, the benchmark index concluded the day with a cut of over 2.64 percent at the 15774 level.

On the technical front, the initial gap down has negated the intermediate support of the psychological mark, and the benchmark index plummeted lower towards the critical swing low of 15700 sub-odd zone. The turmoil across the bourses has undoubtedly dampened the sentiments, also the participants’ woes over the domestic inflation data. As far as levels are concerned, any breach below the 15670-15700 swing zone could disrupt the charts, and the index could plunge lower towards the 15500 mark. On the contrary, the 16000-16100 is likely to be seen as a daunting task for the bulls in the near term.

Going forward, any relief from the ongoing selling saga on the global market could only provide some sign of respite to our domestic market. Meanwhile, the pragmatic strategy would be to stay light on positions and keep a stock-centric approach for trading opportunities. Also, it is advisable to keep a close tab on the domestic macro developments alongside the mentioned levels.

Nifty Daily Chart

Nifty Bank Outlook - (35085)

The global woes continue to hurt financial markets across the globe. We are not spared with this and hence, the BANKNIFTY opened with huge downside gap yesterday in line with our benchmark index. The weakness extended as the day progressed to breach the key level of 33500 and in fact went on to post a low around 33200. Due to some modest recovery at the end, the banking index ended the session with more than 3% cut. Few weeks back, BANKNIFTY broke out from the hurdle of 34500 and then had a brief period of respite for nearly 8-10 sessions. However, towards the latter half last week, the banking space underperformed and in the process, came back closer to this key level of 34500. Yesterday with a huge gap down opening, this level went for a toss and it did not stop there as the high beta heavyweight space continued this pain to conclude at lowest point in a month. For the coming session, 33000 would be seen as critical level because a breach of the same, would lead the index towards March lows of 32155. On the flipside, 33800 – 34350 which is yesterday’s gap area, should now act as immediate resistance and till the time, we do not surpass it, we will not be able to see any relief in the market. Although, the trend is extremely strong in favour of bears, we would avoid shorting here. It’s better to stay on the side-line and wait for picture to get clear.

Nifty Bank Daily Chart

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