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Sensex (61799) / Nifty (18415)

US markets wobbled a bit after the Fed policy on Wednesday. The kind of reaction we witnessed overnight, it appeared as if global markets have digested this development and no major damage was done. However, yesterday morning, markets across the globe started feeling some pressure, which augmented as the day progressed. Hence, the initial gradual decline in our bourses became the considerable correction at the close. Nifty shed more than 1.30% to close convincingly below the 18450 mark.

With yesterday’s sharp decline, not only sentiments but recent chart structure has also been dented now. Since last few months, we did not have any discomfort in all in-between corrections; but the kind of price action we witnessed yesterday, does not augur well for the bulls. The coming session would be quite crucial for our market in order to maintain the recent optimism intact. We are not far away from the key swing low of 18350. If we extend the correction and sustains below it, we may see at least 300 – 400 points in the following sessions. The next levels to watch out for would be 18230 – 18100 levels. Hopefully, this doesn’t happen because it will apply immediate brakes on recent positive trend.

Nifty Bank Outlook (43498)

On the weekly expiry, Bank Nifty started on a weak note, and post a modest recovery in the first hour there was sustained selling pressure throughout the day. Bank Nifty eventually ended with a loss of 1.25% tad below 43500.

Even though, the bank index was making fresh new highs; the momentum was missing for the last few days as we were witnessing small body candles indicating fatigue in the bulls' camp. Yesterday, eventually a price-wise correction was triggered that should be considered a breather for the bulls after the recent relentless run. Technically, if we see we are witnessing a small trend line breakdown on the daily chart and if the selling persists in the coming session, then we can expect this correction to get extended in the near term. The next key support in such a scenario would be the 20ema placed around the 43100 levels. On the flip side, 44000 - 44200 may act as sturdy resistance in case of an immediate bounce back. Traders should understand that the undertone remains bullish and in case of any price-wise correction it should be considered as a buying opportunity to buy quality propositions in a staggered manner.

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