November 24, 2021
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Technical & Derivatives Report
Nifty Bank Outlook - (37273)
Following the weakness from the previous session, the Bank Nifty
started on a negative note however it managed to find support on the
previous session low and started bouncing back. The bank index
eventually ended with marginal gains of 0.39% at 37273.
The BankNifty has now reached the October swing low and from here
this high beta index had witnessed a strong upmove. By returning back
to the origin point of upmove with oscillators in deep oversold
territory we witnessed some bounce back in yesterday’s session.
However, the momentum is strongly gripped by the bears and hence
we expect this support around 36500 – 36600 to be broken very soon.
Hence, any further extension of this bounce should be taken to lighten
up the existing long positions. Immediate resistance is seen around
37800 – 38000 levels.
Key Levels
Support 1 – 36600 Resistance 1 – 37800
Support 2 – 36500 Resistance 2 – 38000
Exhibit 2: Nifty Bank Daily Chart
Sensex (58664) / Nifty (17503)
After yesterday’s sell off, our market started the day on a weak note as
indicated by the SGX Nifty early in the morning. Things looked
extremely bleak in the opening trades but fortunately the bears chose
to take some breather after nearing the support zone of 17250 – 17200.
In fact, as the day progressed, the overall recovery in the market gained
some momentum to reclaim the 17500 mark.
Nifty might have gained only half a percent from the previous close; but
yesterday’s session was full of action as we first witnessed a correction
which was then followed by a decent rebound across the board.
Yesterday’s low precisely coincided with the daily ’89-EMA’ support
which we had mentioned in our previous commentary as well. Since
market was too oversold some respite was evident and this is exactly
what we witnessed throughout the day. Despite this, we still remain
cautious on the market and construe this as merely a technical
rebound. It’s better not to get carried away by these intermediate
recoveries because we are still not out of the woods yet. For the coming
session, 17550 – 17650 is to be seen as stiff hurdle and ideally it would
be a prudent ploy to lighten up longs if Nifty extends yesterday’s
bounce back. On the flipside, 17200 has now become a sacrosanct
support for the Nifty. Although we expect it to be breached soon, it
would be difficult to take a call whether it will happen in next two days
as we are approaching the November expiry.
Exhibit 1: Nifty Daily Chart
Our inclination remains on the bearish side and hence, it’s advisable
not to be in a hurry to do any kind of bottom fishing at this juncture.
The midcap index too had a sharp recovery but if we take a glance
at the daily time frame chart, we can see it giving a precise pull back
towards its trend line breakdown point. Such recoveries should be
used to lighten up longs.
Key Levels
Support 1 – 17250 Resistance 1 – 17550
Support 2 – 17200 Resistance 2 – 17650