Realty, banks going strong

Mixed signals from broader markets kept Nifty down for the fifth consecutive day and Bank Nifty continues to outperform. Nifty was seen down for a fourth consecutive day, but it managed to sustain the previous day trading range. It continued to find support at 18008 - 18050 levels as mentioned and also has its key short term 20 DMA placed at 17952. The recent top of 17947 in September will also be critical, simply said, as resistance becomes support. Along with that, a key support trendline drawn from the recent lows of July is placed at 18050.

There is a weight of evidence in that 100 points range of 18050 - 17950. On the other hand, a clear divergence between Nifty and Nifty Bank was seen as former extended the gain for the second consecutive day posting a stellar rally and making a new all-time high of 40587.35. This space will continue to outperform in short term. The important support for Nifty Bank is placed at 39600 - 40040.

It was a week of rotation where we have seen some decent correction in the benchmark index, and some select sectors outperforming. Breadth continues to remain weak as we see selling pressure on the majority of stocks. The coming week has results waited for major stocks like Maruti, Bajaj-Auto, ITC, ICICI Bank, AxisBank, Volatility is given and possibly a decisive trend may continue to emerge. Realty and banks remain in a strong trend while metals continue to be a loser.

(The author is Technical Analyst, Finversify)