
March 08, 2023
www.angelone.in
Technical & Derivatives Report
Following the strong closing on Friday, the week started on a
positive note and the momentum continued during the morning
session. As the day progressed, there was a lack of buying at higher
levels and profit booking in key heavyweights pulled the bank index
lower to erase a major part of morning gains. The Bank Index ended
the session with marginal gains of 0.24% tad above 41350.
On Monday, the bank index tested the key 50SMA levels however
since it had already rallied in the last few days there was a lack of
follow-up buying as the indicators were overbought. Also, the
traders preferred to book some profits ahead of the mid-week
holiday to avoid undue risk from global cues. Going ahead, since
we have already seen a trend line breakout, traders should
continue to use any dips as a buying opportunity. On the higher
side, we see a sturdy wall of resistance in the range of 41700 -
42000 that coincides with the 50SMA and Budget Day high, hence
we may see some consolidation before the next leg of up move.
Key Levels
Support 1 – 41100 Resistance 1 – 41700
Support 2 – 41000 Resistance 2 – 42000
Exhibit 1: Nifty Daily Chart
Exhibit 2: Nifty Bank Daily Chart
We kickstarted the week on a strong note taking favorable global
cues into a consideration. In the initial hour, the move extended to
reach the 17800 mark. However, the traders chose to take some
money off the table at higher levels, which resulted in a gradual
decline throughout the remaining part of the session. Eventually,
the Nifty managed to hold nearly seven tenths of percent gains to
conclude tad above 17700.
Our markets started the session from where it left on Friday and this
time, we had support from our global peers. But it seems we had
already anticipated it in advance as we witnessed a stellar move
during previous session. On Monday, due to some overbought
condition mainly in the financial space, we didn’t have enough legs
to maintain the similar tempo. Technically speaking, we are not
surprised with this profit booking, because Monday’s high precisely
coincides with the 61.8% retracement of the recent down move.
However, by no means, we expect resumption of recent corrective
phase. This is merely a profit booking after a sharp recovery in last
two days and after reaching important levels. As a trader, such
declines would provide excellent opportunities to create fresh longs
as we expect Nifty to surpass 17800 sooner or later and head
towards the psychological mark of 18000. As far as supports are
concerned, 17600 – 17500 are to be seen as immediate levels.
Traders are advised to continue with an optimistic approach and
now should start focusing more on thematic movers. Apart from
this, the broader end of the spectrum has been sulking for a long
time now, has started showing early signs of revival. It’s better
to keep a close eye on this segment as well.
Key Levels
Support 1 – 17670 Resistance 1 – 17800
Support 2 – 17600 Resistance 2 – 17880
The apt strategy would be to buy on dips and book profits at
higher levels as long the market consolidates within a range. As
far as support levels are concerned, 41100 - 41000 is seen as
immediate support.