By Sameet Chavan

After last week’s tail end correction, we started the week on a positive note on Monday on the back of smart recovery seen in the global peers. We witnessed few hiccups on the same day post the gap up opening as traders chose to unwind a few longs due to uncertainty over the near-term trend. Fortunately, there was no further aberration seen across the globe. In fact, in the following session, we witnessed a decent bump up at the opening on the back of favourable global cues. Thereafter, we witnessed a gradual move to mark a fresh high of 16712.45.

If we look at the vis-à-vis returns in Nifty as compared to the previous series, the Nifty added more than 5% to the bulls’ kitty; but when we dig into it, we will realise, only a few handful heavyweight stocks lifted the benchmark higher. The broader market kept sulking and some of the counters from the F&O space as well went through some decent hammering. So although Nifty came out of its 2-month congestion this series, it was clearly a disappointing one for the traders’ fraternity.

Bank Nifty is in a range and any breakdown in the downward direction below 34500 would trigger the much awaited correction in benchmark index.

Now as we step into the new series, all eyes would be on the banking space. The entire rally of Nifty from 16000 to 16700 has come without the participation of this heavyweight basket. If Bank Nifty has to gain any kind of strength, it needs to surpass the sturdy wall of 36300 convincingly. If this happens then expect Nifty heading towards 16800 – 17000. Since we are at such elevated levels, we need to understand the other side also. Bank Nifty is in a range and any breakdown in the downward direction below 34500 would trigger the much-awaited correction in the benchmark index.

(Sameet Chavan is Chief Analyst – Technical and Derivatives, Angel Broking. Views expressed are the author’s own.)