Bank Nifty commenced the week with a positive tone but experienced significant volatility - Axis Securities
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Nifty
The opening of the week saw Nifty in a downtrend, navigating through a week of notable and fluctuating volatility. Nifty closed at 19266 on 25th August with a loss of 44 points on a weekly basis.
The weekly chart depicts a small bearish candle with an upper shadow, signifying selling pressure near the upper boundary of a descending channel originating from the all-time high. The index continues to move in a lower top and lower bottom formation on the weekly chart indicating negative bias in a short term. The chart pattern suggests that if Nifty crosses and sustains above 19400 level it would witness buying which would lead the index towards 19500- 19600 levels. However if index breaks below 19200 level it would witness selling which would take the index towards 19000-18900. On the daily chart, Nifty sustains above its 50, 100 and 200 day SMA indicating positive bias in the medium term. Nifty continues to remain in a downtrend in the short, so selling on rallies continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 19600-18900 with mixed bias.
The RSI and Stochastic momentum indicators on the weekly chart have both flattened out, reflecting a discernible absence of strong directional impetus.
The trend deciding level for the day is 19280. If NIFTY trades above this level then we may witness a further rally up to 19325-19390-19435 levels. However, if NIFTY trades below 19280 levels then we may see some profit booking initiating in the market, which may correct up to 19215-19170-19105 levels.
Bank Nifty
Bank Nifty commenced the week with a positive tone but experienced significant volatility, swinging in both directions over the course of the week. Bank Nifty closed at 44231 on 25th August with a gain of 380 points on a weekly basis.
The weekly chart displays a small bullish candle with an extended upper shadow, suggesting profit booking occurred near the upper boundary of a descending channel originating from the all-time high. The index is moving in a lower top and lower bottom formation on the daily chart indicating negative bias in a short term. The chart pattern suggests that if Bank Nifty crosses and sustains above 44350 level it would witness buying which would lead the index towards 44500-44700 levels. However if index breaks below 44000 level it would witness selling which would take the index towards 43900-43800. Bank Nifty is trading above 100 and 200 day SMA which are important medium term moving averages, indicating positive bias in the medium term. Bank Nifty continues to remain in a downtrend in the short, so selling on rallies continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 44700-43800 with mixed bias.
The weekly strength indicator RSI and the momentum indicator Stochastic has turned flat indicating lack of strength.
The trend deciding level for the day is 44190 If BANKNIFTY trades above this level then we may witness a further rally up to 44400-44565-44775 levels. However, if BANKNIFTY trades below 44190 levels then we may see some profit booking initiating in the market, it may correct up to 44025-43815-43650 levels.
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