The index witnessed a healthy correction last week although it recovered sharply after briefly touching 21000 when it was supposed to correct to at least 20800 (38.2% from the top). The week ended with volume-based buying in the last hour and the Stochastics on the Daily chart is not only at an extremely oversold zone, with a positive crossover now and the MACD maintaining the positive trend, but also has a divergence in its lows as compared to the chart. The banking index has underperformed quite contrastingly as compared to Nifty and a technically negative bias in USDINR gives more reason to go long in the index.
On the upside, 22040 should be taken out swiftly in the coming week to use the momentum to take the index up to 22400-22500. In case the market feels extra bullish, coupled with more short covering, the index could move up to 23000 as there is no major resistance beyond 22500.
On the downside, the consolidation range of 21800-21650-21500 should prove to be good support points as it took some time for the index to break out of these levels. One can look to go long at these levels, if the market gives an opportunity to.
The broader range of the index for next week's expiry should remain between 21500-22500.
*Note: The levels mentioned above should be used as approximation.
On the upside, 22040 should be taken out swiftly in the coming week to use the momentum to take the index up to 22400-22500. In case the market feels extra bullish, coupled with more short covering, the index could move up to 23000 as there is no major resistance beyond 22500.
On the downside, the consolidation range of 21800-21650-21500 should prove to be good support points as it took some time for the index to break out of these levels. One can look to go long at these levels, if the market gives an opportunity to.
The broader range of the index for next week's expiry should remain between 21500-22500.
*Note: The levels mentioned above should be used as approximation.