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Sensex (55268) / Nifty (16484)

Despite global markets were a bit nervous yesterday morning, we started the session on a flat note around Monday’s close. This turned out to be a mere formality as we witnessed benchmark index sliding in the initial trades itself. Around 16500, market took a breather and then consolidated with a hint of some recovery. However, markets once again became a bit tentative at the stroke of the penultimate hour, which resulted in resumption of downward move to conclude the session with a cut of nearly nine tenths of a percent.

Yesterday’s price activity was almost a replica of Monday’s session which can be termed as an extended profit booking. In addition, the global event (Fed Meet) is lined up mid-week and hence, traders are opting to stay light ahead of it. Technically speaking, the market texture remains unchanged as we are still trading convincingly above key levels. Also, we have now entered a gap area of 16490 – 16360 created last week which should now be seen as strong support zone for the index. If there is no aberration globally, we are likely to attract buying interest in this zone.

Nifty Daily Chart

Nifty Bank Outlook - (36408)

Bank Nifty started on a mild negative note and from the opening levels, it witnessed further profit-booking forming an open high kind of scenario. Subsequently, there was some intraday bounce back however it got sold into as the bank index slipped lower for the remaining part of the session to eventually end with a cut of 0.87% tad above 36400.

Post the strong up move seen during the last week, this week so far has been of profit booking and this was on cards ahead of key FOMC and as the oscillators were in the overbought zone. On the daily chart, we have seen a breakout by closing above the May swing high at 36000, and technically it is the tendency of prices to retest breakout levels before achieving bigger targets. Hence, 35800 - 36000 would be the key levels to watch for the next few sessions. On the flip side ahead of the expiry session, 36800 - 37000 is the immediate resistance. The undertone remains bullish however ahead of the key FOMC meet, one can expect an increase in volatility hence one should avoid aggressive bets.

Nifty Bank Daily Chart

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