Market ended
lower on Monday due to the massive slip in the banking stocks after a month or
so. At close, Sensex ended 194 points to 37935 while the Nifty index ended at
11132, down 62 points. The banking index came in red after the Reserve Bank of
India in its Financial Stability report forecast that bad loans could soar due
to a rise in pandemic-led debt burdens. Because of the pandemic, loan growth
has slowed and the moratorium has hit repayments. This is a double whammy for
banks.
The Nifty closed the day below 11150 and formed a bearish candle on daily
chart, as the closing was lower than the opening value. Considering the
consistent weakness after the recent rally, we advise you to avoid long
positions. The Nifty was decisively trading below its 50-day moving average and
if it slips into some sort of multi-days downtrend, then corrective swing would
get extended into the 11100–11000 zone. For the time being, strength in the
index shall not be expected unless it closes above 11200 levels. Traders should
avoid long positions and look for some signs of stability around 11200 whereas
existing shorts should be squared off if the Nifty fails to close below 11100
in the next trading session.
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Resistance: 11200, 11300
Support: 11100, 11000
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