SEPT 19, 2022
Technical & Derivatives Report
Nifty Bank Outlook (40777)
The banking space has witnessed an action-packed move during
the last week, wherein the spectacular start of the week pared
down in the last two trading sessions. However, on the weekly
basis, the Bank Nifty index managed to continue its positive stature
and even outperformed the benchmark index. The index concluded
the week with a gain of 0.89 percent and settled at 40777 levels.
On the technical aspect, though, the banking index has maintained
its uptrend for the fourth consecutive week, with last two days’ of
a profit booking, the weekly chart now depicts a ‘Shooting Star’
Japanese candlestick pattern. Since it has formed exactly at record
highs, it would be unfair to overlook it. At this juncture, we are
hoping for this pattern to not get activated, so that we can certainly
be spared from the real repercussions of it. As far as levels are
concerned, 40200 – 40000 are to be considered as key levels. A
weekly close below this would certainly damage the recent bullish
structure. On the flip side, until we witness a decisive breach above
the 41800 zone, a range-bound move could be seen in the
Support 1 – 40200 Resistance 1 – 41000
Support 2 – 40000 Resistance 2 – 41800
Sensex (58841) / Nifty (17531)
Friday’s session turned out to be a nightmare as after a gap down
opening, we witnessed a sustained selling throughout the session to
conclude the week with 1.70% cut, marginally above 17500.
Generally, we say ‘All’s well that ends well’ but this time it’s the
exact opposite. We had a perfect start of the week, but the end was
certainly not everyone would have wished for. The broader
structure remains bullish but with Nifty closing convincingly below
17600 has dented the intermediate structure for sure. Pricewise, it
resembles a ‘Head and Shoulder’ pattern on daily time frame chart,
which does not augur well for the bulls. If this pattern proves its
significance, we may see further correction towards 17200 – 17000
in this week. But as of now, we do not want to fall into this camp.
We would rather reassess the situation in the first half of this week.
As far as support is concerned, 17400 we are seeing as a key
support. The moment we see Nifty sliding below it, we may see
correction getting extended in the market. On the flipside, if Nifty
has to find its mojo back, it needs to go beyond Friday’s high of
17820 on a closing basis. So meanwhile, any minor bounce back
towards 17650 – 17750 should ideally be used to exit longs.
After Friday’s close, we would like to adopt a wait and watch
approach and let’s see how global market perform from hereon.
Traders are advised not to get intimidated by Friday’s correction,
rather keep a close tab on above mentioned scenarios. Also, one
should avoid trading aggressively till the time market stabilizes
from this turbulence. Sectorally, the recent leader, BANKNIFTY is
placed at an interesting juncture. Hopefully, it manages to lift the
overall sentiments in this week.
Support 1 – 17400 Resistance 1 – 17650
Support 2 – 17200 Resistance 2 – 17750