“Sensex (60566) / Nifty (18015)”
Friday’s destructive session was followed by a muted opening yesterday morning in absence of global triggers. In the initial hour, the nervousness persisted as we challenged Friday’s low to enter sub-17800 terrain. Fortunately, the mighty bulls came for a rescue as they saw this opportunity to re-enter this market after 2-3 days of meaningful correction. Most of the beaten down spaces rebounded sharply which was led by the heavyweight banking conglomerates. As the day progressed, the buying kept accelerating to eventually reclaim the 18000 mark on a closing basis.
After the initial hiccups, our markets stabilized at lower levels and since market participants felt Friday’s decline as an overreaction, they literally latched on to most of the heavily sold counters. Now, although we are not completely out of the woods yet, the bulls have reassured 17800 – 17700 as a sacrosanct support zone. To confirm the sustenance, we must surpass 18050 – 18100 in the coming session and should ideally close above it. This will confirm the completion of price correction and we may then resume the higher degree uptrend. In this scenario, 18200 – 18300 are the immediate levels to watch out for.
Nifty Daily Chart
As of now, we remain hopeful and expect the market to confirm the much-awaited Santa rally to conclude the calendar year 2022 on a happy note. Sectorally, the broader market was worst impacted pocket last week and yesterday, the moment, sentiments improved, the mid and small cap counters recovered quite sharply. We advise traders to remain upbeat but at the same time, its better to go one step at a time.
Nifty Bank Outlook (42630)
The Bank Nifty had a flat start to the week and during the initial few minutes, prices sneaked below Friday’s low. However, there was strong buying seen in heavyweight counters that pushed the bank index higher. The positive momentum continued throughout the session and Bank Nifty eventually ended with strong gains of 2.31% at 42630.
After the last two weeks of profit booking, prices had reached key support of the previous breakout level and indicators were highly oversold. Yesterday after respecting the key support, prices strongly bounced back to form a strong bullish candle stick pattern on the daily chart. This bounce was supported by broad-based buying in heavyweight private banks as well with the mesmerizing move in the PSU banking space. We expect this positive momentum to continue and hence advise traders to remain upbeat on the stock-specific action. As far as levels are concerned, immediate support is seen at 42350 followed by 42000 whereas on the higher side immediate resistance is at 20EMA around 43000 followed by 43230 levels.
Nifty Bank Daily Chart
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Our market has witnessed a strong recovery from last week’s closure. The Nifty50 index snapped the streak of selling spree and settled a tad above the 18000 mark, procuring over a percent at the start of the week.
FIIs were net sellers in the cash market segment to the tune of Rs. 498 crores. Simultaneously, in Index futures, they bought worth Rs. 1032 crores with a decrease in open interest, indicating short covering.
In the F&O space, we witnessed short covering in both indices at the start of the week. On the options front, the piling up of OI is seen at the 17800 put strike, followed by 18000 PE, indicating nearby support in Nifty. On the higher end, 18200 call strikes hold the maximum OI concentration, signifying a strong intermediate resistance. Meanwhile, the stronger hands have covered some shorts, resulting in an expansion of ‘Long Short Ratio’, which surged to 47% from 44%. Considering the recent price action, the undertone is likely to remain upbeat, wherein a follow-up buying could confirm the Santa rally in the market.
Disclaimer:- Shri Ram Traders Club doesn’t Have any holdings and we do not provide any suggestion to anyone. This post is only for Educational Purpose…