Bank Nifty started the week on a positive note and traded with extreme volatility on either side throughout the week - Axis Securities
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Nifty
Nifty started the week on a positive note and remained consolidated for most part of the week within 18000-17600 levels representing lack of strength. Nifty closed at 17917 with a gain of 245 points on a weekly basis.
On the weekly chart, the index has formed a bullish candle however it has remained restricted within previous week's High-Low range representing indecision amongst bull and bears. The index is moving in a Higher Top and Higher Bottom formation on the weekly chart indicating sustained strength. The chart pattern suggests that if Nifty crosses and sustains above 18000 level it would witness buying which would lead the index towards 18200-18400 levels. However if the index breaks below 17600 level it would witness selling which would take the index towards 17400- 17200. On the daily chart, Nifty sustains below its 20 day SMAs indicating negative bias in the short term. Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 18200-17500 with mixed bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have both turned negative and are below their respective reference lines indicating negative bias.
The trend deciding level for the day is 17920. If NIFTY trades above this level then we may witness a further rally up to 17945-17970-17990 levels. However, if NIFTY trades below 17920 levels then we may see some profit booking initiating in the market, which may correct up to 17895-17875-17850 levels.
Banknifty
Bank Nifty started the week on a positive note and traded with extreme volatility on either side throughout the week. Bank Nifty closed at 39574 with a gain of 458 points on a weekly basis.
On the weekly chart the index has formed a "Doji" candlestick formation indicating indecisiveness amongst market participants regarding the direction. The index is moving in a Higher Top and Higher Bottom formation on the weekly chart indicating sustained up trend on long term charts. The chart pattern suggests that if Bank Nifty crosses and sustains above 40000 level it would witness buying which would lead the index towards 40500-40800 levels. However if index breaks below 39300 level it would witness selling which would take the index towards 39000-38400. Bank Nifty is trading above its 20, 50, and 100 day SMA's which are important short term moving averages, indicating positive bias in the short to medium term. Bank Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 40500-39000 with mixed bias.
The weekly strength indicator RSI continues to remain flat above its reference line indicating positive bias. However momentum oscillator Stochastic has turned negative from the overbought zone indicating a possible consolidation or a downmove in the near term
The trend deciding level for the day is 39610 If BANKNIFTY trades above this level then we may witness a further rally up to 39700-39830-39920 levels. However, if BANKNIFTY trades below 39610 levels then we may see some profit booking initiating in the market, it may correct up to 39480-39385-39260 levels
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