Markets retreat, Bank Nifty down after breaching resistance

Indian benchmark indices retreated after an upside attempt in the first two hours of trade on Wednesday. All the sectoral indices barring Auto index nosedived to trade in red. Auto was up amid revival in the sales data and auto major, Tata Motors grabed top position with 4 per cent plus gains.

After metal, banks were the worst performers with Bank Nifty tumbling more than 1.5 per cent. The sudden turnaround was in the wake of China backfiring on Trump with tariffs on 106 US products and the slight caution ahead of RBI policy review.

In the Bank Nifty index, barring RBL Bank and Federal Bank which rose 2.1 per cent and 0.3 per cent respectively, all other banks traded in red where BOB and Kotak were fell with 2 per cent and more losses.

Technically, after bouncing back from its crucial support at 23,600-23,610 level, Bank Nifty had bounced back. On Wednesday, Bank Nifty attempted to breach its major resistance at 24,500 levels but could not sustain and shed points covering almost two days winning streak. Thereby, Bank Nifty continued its lower top and lower bottom pattern. The prior upside was not supported by the volumes and 14-period RSI too remained below 50 and still looks weak with a negative crossover. Going forward, we hold 25,000-25,150 as the resistances in case 24,700 is crossed. On the downside, 24,000 followed by 23,600 will act as supports.