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Sensex (67519) / Nifty (20103)

On the weekly expiry day, the benchmark index had a positive start, but there wasn't significant momentum following the opening, leading to a period of price consolidation within a range. Eventually, Nifty concluded the session with marginal gains of 0.16%, closing a tad above 20100.

After experiencing strong market action over the past week, yesterday was comparatively lackluster for the Nifty. It acted as a breather day for the bulls for the index, as the traders preferred focusing on action outside the index. From a technical standpoint, not much has changed, as the price formed a small-body candle on the daily chart. Nevertheless, the Nifty's ability to maintain levels well above the July swing high of 19991.85 bodes well for bullish sentiment. The indicators are indicating overbought conditions, underscoring the inherent strength in the market. The recommended strategy should remain focused on buying during intraday dips. In this context, the psychological support levels are situated at 20000, with Tuesday's panic low around 19900 serving as a key support level. On the flip side, as the Nifty is in uncharted territory, it's advisable to consider reciprocal retracement, with the next resistance appearing around 20200, followed by 20450. Traders should keep a close eye on these levels and tailor their trading strategies accordingly.

Nifty Bank Outlook (46001) 

A strong comeback on Wednesday was followed by a firm start in the banking index above the 46000mark. In the initial trades, positive ticks were observed in most constituents to extend the lead towards 46150. However, due to lack of follow-up buying, the index slipped into a consolidation mode. The similar activity continued for the remaining part of the session to eventually conclude the session with marginal gains.

In our previous commentary, we mentioned that the overall chart structure of the Bank Nifty looks sturdy and we may soon see fresh record highs. Yesterday’s consolidation wasn’t anticipated but there is no damage to the overall chart structure as the index has managed to sustain above Wednesday’s close. Such pause should be treated as a healthy development before the start of the next leg of the rally. In terms of levels, 45800-45500 should now be seen as immediate support for BANKNIFTY, whereas on the flipside, 46400 - 46600 are the levels to watch out for.

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