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Sensex (52329) / Nifty (15752)

Nifty started the week on a positive note and continued its exercise of making new records and marked a high of 15773 yesterday. The trading range for the day was not much large and the index posted gains of about half a percent and ended around 15750.

The uptrend continues for the Nifty as it inched higher to mark new records everyday. However, with the momentum missing from the banking space, the pace of upmove has slowed down a bit. Also, Nifty is trading at some important levels where 15770-15800 is the resistance zone. When prices are trading at all-time high, the retracement levels usually work well in projecting the probable targets/resistances in uncharted territory. Now, if we draw some retracements on the recent corrective move of Nifty, then 127% retracement of the correction from 15431 (Feb. 2021 high) to 14151 (April. 2021 low) comes in the range of 15770-15800. Hence, it would be crucial to see how the index behaves around this range. As of now, the market breadth continues to remain positive and hence, there are no signs of reversal. On the flip side, the index has been respecting the ‘20 EMA’ on the hourly chart on intraday dips which is now placed around 15675. Thus, the above analysis indicates resistance for Nifty in the range of 15770-15800 and support around 15675 followed by 15600. A move above 15800 would then lead to a continuation of the trend towards the psychological 16000 mark.

The market breadth continues to be robust which is a clear indication that stock specific moves are providing good trading opportunities for short term traders. Hence, one should continue to trade with a stock specific approach and keep a tab on the above mentioned levels on the index.

Nifty Daily Chart

Nifty Bank Outlook - (35444)

The new trading week started on a pleasant note as there was some positivity seen across the globe. With this, our benchmark registered a fresh record high but the banking space remained muted from the opening tick itself. Although BANKNIFTY ended the session with nominal gains, the momentum was missing in banking counters.

Throughout the day, BANKNIFTY vacillated in a range of merely 120 – 150 points which is very unusual for such high beta traders’ favourite index. The Nifty is well above its previous highs and banking index is still nearly 7% away from it, which is a clear sign underperformance. Practically, it has lot of room if it starts catching up with the benchmark; but if that has to happen, the financial space will need some solid trigger which will propel it to new highs. Till then expect this underperformance to continue. For the coming session, 35600 – 35800 are to be seen as immediate hurdles and only a sustainable move beyond this would result in some trended move. On the flipside, 35100 is to be considered a key support.

Nifty Bank Daily Chart

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