Nifty Daily Chart
Globally, most of the markets have been doing well since last few days and yesterday morning too, we had favourable cues from the peers. We kick-started the week on a positive note as indicated by the SGX Nifty tad above 17600. During the first half, we witnessed some consolidation with some hint of profit booking. However, the selling aggravated as we stepped into the second half and as a result of this, market came off sharply to eventually close below the 17400 mark by shedding nearly eight tenths of a percent from the previous close
It was certainly a bright start to the week but as we entered into the corridor of uncertainty, market started to feel some heat. Due to reinforced selling, we not only erased morning gains but went on to close well inside the negative terrain. If we look at yesterday’s price action in hindsight, we must accept that market has respected levels and as we alluded to in our previous commentary, a cluster of resistance around 17600 – 17700 has proved its significance. The coming session would be quite crucial for market; because an extended correction from hereon will lead to resumption of recent downtrend. As far as levels are confirmed, 17200 – 17100 are to be considered as next supports; whereas on the higher side, 17500 – 17600 – 17700 remains to be a cluster of resistance.
Traders are advised to stay light and although there was stock specific profit booking seen yesterday, one can still continue with the same approach as we expect trades to happen in both direction.
Nifty Bank Outlook – (36925)
Bank Nifty as well started on a positive note however after entering the vicinity of resistance it lacked follow-up buying and it slept along with the broader markets. It eventually ended with a loss of 0.49% at 36925.
Yesterday’s selling from higher levels definitely does not augur well for the bulls and hence indicates a lack of strength at higher levels. Going ahead we continue to see resistance around the 37300 – 37600 zone and as long the bank index fails to give sustain breakout above the same bounces are likely to get sold into. On the flip side, 36800 is the key support below which we expect the weakness to extend further towards the 36000 mark. The volatility is likely to remain high and hence traders are advised to avoid undue risk