Sensex (31834) / Nifty (9985)
For the third consecutive day, our markets had a positive opening in-line with SGX Nifty. This was followed by an immediate upmove and then a consolidation throughout the first half. However, a strong bout of selling in the latter half dragged the index significantly lower from day’s high to conclude the session below the 10000 mark.
With reference to previous articles, we are not so surprised with the corrective move we witnessed post the midsession. In fact, the velocity at which it came down was certainly intimidating; reminding of a sharp correction we saw during the penultimate week. This was one of the main reasons we avoided participating in index specific longs. Technically speaking, yesterday’s high of 10067.35 almost coincided with the 78.6% retracement of recent down move. Going ahead, this level would be seen as a strong hurdle and the way it has closed yesterday, a possibility of further weakness is on cards now. For the coming session, 9950 – 9880 levels are likely to be tested and hence, traders are advised to stay light on positions.
Nifty Bank Outlook – (24108)
The Nifty Bank index traded with a positive bias during the first half of yesterday’s session. However, the index later gave up all the gains and corrected along with the broader markets to end the session with a loss of about 1 percent.
If we observe the intraday charts, the ‘200 SMA’ on the hourly chart has acted as a resistance for the index. Yesterday’s corrective move from the mentioned resistance also opens a probability of formation of a ‘Lower Top’ on the daily chart after a long time. Hence, it is advisable to stay cautious and look to book profits/exit long positions. The intraday supports for the Nifty Bank index are placed around 24000 and 23900 whereas resistances are seen around 24260 and 24330.
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