Aug 05, 2022
Technical & Derivatives Report
OOOOOOOO
Nifty Bank Outlook (37756)
The global screen was cheerful yesterday morning and as a result, the
banking index too opened higher in tandem with benchmark. In the
initial trade, the BANKNIFTY hastened slightly beyond the 38200 mark
and then consolidated with a small hint of profit booking. Around the
mid session, the profit booking mode turned into a sell off and in the
process, the BANKNIFTY plunged towards the 37200 mark (i.e. 1000
points from morning high) in a flash. Fortunately the selling got
arrested as we stepped into the latter half and in fact, with the help of
modest recovery, the BANKNIFTY ended the session with over six
tenths of a percent loss. In our previous commentary, we had clearly
mentioned how 38200 - 38500 is a sturdy wall for banking index and
traders should certainly take some money off the table after reaching
this zone. Yesterday's brutal sell off triggered after making a high of
38231.85. Although the magnitude at which it came, was really
surprising and even intimidating as well. For the coming session,
38000 followed by 38200 remains a strong hurdle; whereas on the
flipside, 37500 - 37200 are to be seen as key supports for the banking
index. The banking space is going to be in focus today on the back of
RBI monetary policy. Let's see how things pan out post the event.
Key Levels
Support 1 – 37500 Resistance 1 – 38000
Support 2 – 37200 Resistance 2 – 38200
Exhibit 1: Nifty Daily Chart
Exhibit 2: Nifty Bank Daily Chart
Sensex (58299) / Nifty (17382)
The Indian equity market has started the day with a decent gap up
tracking the positive global cues, wherein the benchmark index inched
towards the 17500 mark. But soon after the opening, markets lost their
sheen and slid inside the negative terrain. Generally, we term it as a
profit booking, but this time it wasn’t the normal move as we saw a
complete nosedive around the midsession, which was intimidating at
one point. Within a blink of an eye, we not only broke 17400 and 17300
but also went on to thrash the key support of 17200. Fortunately, it did
not turn out to be a nightmare, as the mighty bulls came to rescue and
defended the territory throughout the remaining part of the session.
With the intense tug of war between the bulls and the bears, the Nifty
managed to conclude the action-packed weekly expiry almost at
Wednesday’s close.
The market took a breather post six consecutive days of its up move,
but it was a bit scary at one point. Technically, the bullish structure
remains unchanged as the bulls showed their resilience and
reciprocated from lower grounds decisively. As far as levels are
concerned, 17500 is likely to be seen as a sturdy wall for the bulls, and
any persistent breakthrough could only open the gates for further
upside for the index. On the flip side, 17200 has proved its mettle in
providing vital support. Still, yesterday’s price activity was a reality
check for market participants, which is why we have been reiterating
not to get complacent at any point. The immediate support can be seen
around 17300.
The RBI monetary policy is slated in the coming session, and hence,
traders should keep a close eye on the event. Whether it turns out
to be a non-event or not, it would really be interesting to watch.
Apart from this, global development should also not be overlooked,
and hence, we may see some interesting actions going ahead.
Key Levels
Support 1 – 17200 Resistance 1 – 17450
Support 2 – 17150 Resistance 2 – 17500