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Nifty : 21512

Technical Outlook

Day that was…

Equity benchmark snapped two days advances tracking subduedglobalcues.TheNifty lost198 points or 0.9% to settle the session at  21512. Broader market performed in tandem with the benchmark as Nifty Midcap and Small cap lost1% and0.6%, respectively. Sectorally, barring Realty, media all other indices ended in red weighed down by financials, metal, FMCG 

TechnicalOutlook

•  The index started the week on a flat note and gradually inched south ward as the day progressed. The daily price action resulted intobear candle that engulfedpast two sessions up move, indicating corrective bias amid overboughtconditionswithnegativedivergence

• The index is taking breather after past two months spectacular up move(16%).Webelieve, index will undergo consolidation in the 21800-21300 range amid stock specificaction as weenter in the Q3 earning season.This would make market healthy and pave the way for next leg of up move.

• Key point to highlight is that, BankNifty (whichcarries ~36%weightage inNity) has approached near the key support of past two week’s low of 47400. Thus, holding above the same would keep pull back option open which would eventually provide impetus for revival of upward momentum in Nifty.Hence,buy ingondips would be the prudent strategy to adoptas strong support is placed at  21300.

• The formationof higher peakand troughsupportedby acrosssector participation makes us confident to retain support base at 21300 as its is confluence of 61.8%

Nifty Bank: 47450

Technical Outlook

Day that was:

The Nifty Bank index declined amid profit taking in large banks amid muted global cues. Nifty PSU bank and Private banks indices declined 2% and 1.5% respectively leading NiftyBank index to close Mondays session at 47450, down 1.5% or 708 points  

Technical Outlook:

• The index started the session on a negative note and gradually extended losses throughout the session led by heavyweight banks. In the process index breached past two week lows (47400) on intra day basis and formed a sizeable bear candle on daily chart. Index is currently poised at critical support of 47400 (two week lows and 20-day ema) In coming sessions, holding the same would keep pull back options open else would signal extended profit taking towards 46900 levels. While overall structure remains positive, on immediate basis, Mondays high around 48200 would remain immediate hurdle for index in this week

• Structurally, index is undergoing retracement of November – December rally wherein it rallied around 15% over 9 week period. Couple of weeks consolidation in the broad range of 46500-48500 would make larger trend healthier and provide fresh entry opportunity. Hence investor should take benefit of ongoing decline to build long positions with focus on PSU banking space which we expect to outperform over medium term

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