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Sensex (54303) / Nifty (16202)

Sharp sell-off overnight in US markets poured complete water on bulls attempt made on Thursday and as a result, Friday’s session concluded on a negative note around the 16200 mark with a cut of 1.68%.

There has been no relief in US bourses and any small rebound is getting sold into, which is having a rub off effect in all markets across the globe. Although, we remained above key supports for the major part of the week, Friday’s session displayed lot of weakness. We have been continuously alluding to key support of 16300 – 16260 on a closing basis. These levels are finally broken which has negated the minor upward trend that emerged during the previous week after surpassing the 16400 mark. Market is unable to show any kind of strength at higher levels; but despite this we are still not getting convinced with the weakness. We would rather reassess the situation in the first half of the this week and all eyes on crucial levels like 16000 on the lower side and 16400 on the upside.

The pragmatic strategy would be to stay light on positions and stock specific also, we are seeing lot of whipsaws on either side. In fact, it has become a nightmare in trading stocks in last couple of weeks. Let’s see how things pan out going ahead and we are still hopeful of some recovery in coming days. If this has to happen, US markets need to provide that much needed relief.

Nifty Daily Chart

Nifty Bank Outlook - (35085)

On Friday, Bank Nifty started with a gap down opening around Thursday's low and from there it continued to slip lower throughout the day. Any intraday bounce got sold into and the bank index eventually ended with a loss of 1.71% at 34484.

For the last three sessions, the support around 34800 was holding well on a closing basis, and the way broader markets performed on Thursday it seemed the bulls had an upper hand. However, the market participants were completely surprised by a huge gap-down opening due to weak global cues that further dragged the bank index lower on Friday. Now the momentum is back with the bears and as long we don't see concrete reversal signs traders are advised to avoid aggressive bets as choppy moves are seen on both sides of the trend. As far as levels are concerned, crucial support is seen in the vicinity of 34000 - 34200 which coincides with a 61.8% retracement of the up move seen from the May swing low. On the flip side, 34800 - 35000 is the immediate resistance zone.

Nifty Bank Daily Chart

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