MORNING MANTRA- NIFTY OUTLOOK OF THE DAY

Nifty (8550.90, -20.00, -0.23%)

The Nifty level of 8550 held out in yesterday’s trade, and the international cues are flat to marginally positive this morning. What this essentially means is that we ought to fend for ourselves on a day when the derivative settlement is just a couple of days away. While the short term downtrend is alive and kicking its momentum is somewhat diminished; it is but quite natural, coming very close to the major support area between 8530 and 8470, you should not be surprised to see the bearish momentum flagging off a bit especially when the settlement for derivatives is knocking at the door. Thus, it is not quite unreasonable to expect some bit of short covering happening in today’s session especially in stocks where we saw hammering has been happening for quite some time like some of the metal counters. However, we also need to keep this in mind that a large scale fresh call option writing for the 8600-strike for the current series for a closing premium of just around 30 points shows that market participants do not expect any huge short covering happening.

• Most critical levels for the day: 8530, its immediate support as well


• Strong support: 8530 – 8470


• Major support: 8420 – 8380


• Strong resistance: 8583 – 8612


• Major resistance: 8630 – 8655

Bank Nifty (18449.00, -157.35, -0.85%)

The weakness continues in this index; the bearish belt-hold has been confirmed by two days of down closes yet we would say that unless the Bank Nifty were to take out the range between 18425 and 18317 today, you could expect some bounce on the upside prompted by some short covering. On the upside, so long as it fails to take out the 18585-level, no rally is likely to sustain at higher levels. Any attempt at a pullback, the index needs to take out the zone between 18779 and 18811 for any misstep there would put index again on the reverse gear.

• Most critical levels for the day: 18425, its immediate support as well for the day


• Strong support: 18425 – 18317


• Major support: 18210 – 17991


• Strong resistance: 18585 – 18684


• Major resistance: 18779 - 18811