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Sensex (52154) / Nifty (15315)

Yesterday morning, the global set up was just ideal to have a good head-start at new record highs. In fact, the index managed to extend gains in few minutes of trade to reach yet another milestone of 15400. Everything looked hunky dory; but all of a sudden market started correcting in the subsequent hour after posting a new high of 15431.75. The profit booking aggravated at the mid-session to test the sub-15250 mark. Fortunately the fall got arrested and due to the modest recovery in the latter half, Nifty ended the volatile session on a flat note.

Monday’s strong close coupled with favourable global cues in the morning, our markets managed to carry their momentum at the opening yesterday. However, since we reached a crucial resistance zone of 15380 – 15500 (which is the 161% ‘Golden Ratio’ of the entire fall from Jan’20 highs to March’20 lows), markets saw some profit booking at higher levels. We were not surprised with it as we had advocated on booking profits in the mentioned range. With yesterday’s small correction, still there is no weakness visible on charts; but we continue to remain cautious and advise against creating aggressive longs now. For the coming session, 15380 – 15430 remains to be a key resistance; whereas on the lower side, further weakness is possible after breaking below 15240. In this scenario, 15175 – 15100 can be retested.

Nifty Daily Chart

Nifty Bank Outlook - (37306)

Post-Monday's strong upmove, the bank nifty started on a positive note however it lacked follow-up buying and crept lower for the major part of the session to mark an intraday low of 36762. Subsequently in the penultimate hour, some bounce back was seen to eventually end with half percent loss at 37098.

Yesterday, we mentioned avoiding aggressive bets as the bank index is in overbought territory, and on the same line, we witnessed good profit booking in the heavyweight private banking space. On the other hand, good traction was seen in some of the PSU banks on the news of privatisation. Going forward, we continue to remain cautious however we feel individual stocks may continue to outperform, and hence traders to stick with a stock-specific approach. As far as levels are concerned, immediate support is placed around 36600 and 36100 whereas resistance is seen around 37500 and 37700 levels.

Nifty Bank Daily Chart

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