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Sensex (60353) / Nifty (17992)

We had a promising start yesterday as indicated by the SGX Nifty early in the morning. Within few trades, things came to normalcy as we pare down early lead and started correcting in line with previous session. During the first half, although Nifty showed some resilience as compared to the banking index, the selling augmented around the mid-session. In this process, Nifty sneaked below its key support of 17900. Fortunately, with some tail end recovery, Nifty managed to recoup some losses and eventually ended the session tad below the 18000 mark.

It was a second consecutive session wherein our market corrected without any justification to it. But since market is superior, we have no option than to accept whatever comes our way. Since we have managed to defend 17900 comfortably on a closing basis, the recent trading range remains intact. In fact, if we meticulously observe yesterday’s price action, we did observe the real pain was restricted only to few heavyweights. The broader market was showing some resilience which eventually got translated into a smart up move in the final hour of the session. This leaves us with some hope of recovery in the coming session.

Nifty Bank Outlook (42609)

Bank Nifty started the weekly expiry on a flat note however right from the word go there was weakness in some of the heavyweights that dragged the index lower. As the day progressed, the bank index marked an intraday low of 42298 however with the help of a smart bounce during the last hour the bank index eventually ended a tad above 42600 with a loss of 0.81%.

With the weakness seen in the last two sessions, the bulls have lost the momentum however there was some respite at lower levels and prices have managed to defend the key support of 50SMA on a closing basis. Now yesterday's low would be pivotal and if broken the selloff may extend towards 41500 levelsin the coming days. On the flip side, 43000 followed by 43200 would be considered as immediate resistance. For the uptrend to resume 43500 remains the key barrier to cross. We sense volatility is likely to remain on the higher side, hence traders need to be selective and avoid aggressive bets.

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