Daily Technical Report For Stock Market 07 November

Sensex (20895) / Nifty (6215)

Yesterday, our benchmark index opened quietly and similar to Tuesday’s session, we witnessed selling pressure as the day progressed. As a result, our benchmark index eventually closed in the negative territory. The Consumer Durables, Banking, Realty and Metal counters were among the major draggers; whereas the IT, Power and Healthcare sectors outperformed our benchmark index. The advance to decline ratio was in favor of the advancing counters.

Formation

  • The ’89-day EMA’ and the ’89-week EMA’ are placed at 19907 / 5926 and 18959 / 5698 levels, respectively.
  • The ’20-day EMA’ and the ‘20-week EMA’ are placed at 20731 / 6160 and 19995 / 5952 levels, respectively.
  •  The monthly momentum oscillators are now positively poised.
  •  On the monthly chart, we are observing a breakout from the ‘Multiple Resistance Zone’.

 

Trading strategy:

Yesterday, it was the second consecutive session where we witnessed a lethargic movement; but the bias remained bearish throughout the session. During the session, the Nifty sneaked marginally below the mentioned support level of 6222 and eventually, closed around it. Looking at the daily chart, it can be clearly seen that the index is now placed exactly at the convergence point of two trend lines (please refer the exhibit). Hence, yesterday’s low of 6208 can be considered as a support in the near term. A close below this level may apply brakes on the ongoing optimism. In this scenario, we expect a decline towards the immediate support levels of 6160 – 6070. On the flipside, 6250 – 6305 levels would act as immediate resistances for the index. At present, we advise traders to adopt a stock specific approach and keep revising stop losses in order to safeguard their profits.

Actionable points:

View           Neutral

Resistance Level   6305 – 6358

Support Level      6160 – 6070

 

Bank Nifty Outlook – (11293)

In-line with our benchmark index, the Bank Nifty too opened on a subdued note. Subsequently, the index experienced substantial selling pressure and shed nearly two percent to become the primary sector in applying pressure on the benchmark index. On the daily chart, we can observe that the Bank Nifty has now precisely given a pull back towards the ‘Horizontal Line’ support zone (please refer the exhibit). Hence, in case of a bullish scenario if Bank Nifty manages to hold the 11300 mark then any sustainable move beyond 11400 would attract buying interest among market participants. We then expect 11550 – 11650 levels to be re-tested in coming trading sessions. On the flipside, a fall and close below 11170 may result in immediate correction towards 11070 – 11000 levels.

Actionable points:

View Neutral

Support Levels 11219 – 11170

Resistance Levels 11400 – 11550

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