Pre- Market Commentary: Nifty: Within the consolidation 22,800 is the immediate support

MUMBAI, 20 OCTOBER: NIFTY on Monday’s session formed a sizable bearish candle erasing the previous session’s gains. It resembles a bearish engulfing candle, signalling profit booking at higher levels after a strong up move of almost 1000 points in last 2 weeks.

In today’s session market is opening on a positive note amid strong global cues. On the higher side key level to watch is Monday’s high of 23,175. A move above the same will signal extension of the last two weeks pullback and open upside towards 23,500 levels in the coming sessions being the 50% retracement of the entire recent decline from 24,774 to 22,180.

However, failure to reclaim Monday’s high would signal corrective consolidation in the range of 23,175 to 22,500. Within the consolidation 22,800 is the immediate support area being recent breakout area. While 22,500-22,600 being the major support area from short term prospective.

Bank Nifty CMP: likely to consolidate in the range of 54,700-56,050 amid stock specific action

Bank Nifty formed a bearish candle with a lower high and a lower low indicating a weakening of near-term momentum. The index opened on a weak note following the quarterly results of major private banking stocks. However, PSU Bank stocks displayed pockets of strength and outperformed the Bank Nifty.

Going ahead, Index likely to consolidate in the range of 54,700-56,050 amid stock specific action.

On the higher side a decisive breakout and sustained move above last week high of 56,065 would strengthen the recovery momentum and open the upside towards 56,500 and 56,900, corresponding to the 50% and 61.8% Fibonacci retracement levels of the decline from 58,706 to 53,785.

On the downside, a breach below Monday’s low of 55,330 would reinforce the corrective bias and could extend the decline towards 55,000–54,700, a zone supported by the psychological level of 55,000 and the previous week’s low.

Report by: Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking

(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing)

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