Bank Nifty started the week on a positive note but witnessed selling at higher levels - Axis Securities
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Nifty
Nifty started the week on a positive note but witnessed selling at higher levels to end the week on weak note. Nifty closed at 17604 with a loss of 423 points on a weekly basis.
On the weekly chart the index has formed a Bearish candle which has totally engulfed its previous week's move forming a "Bearish Engulfing" candlestick formation which is a bearish pattern. Index breaks below 4 weeks of consolidation between the 18300-17800 range. The chart pattern suggests that if Nifty crosses and sustains above 17800 level it would witness buying which would lead the index towards 18000-18200 levels. However if index breaks below 17500 level it would witness selling which would take the index towards 17300-17100. Nifty is trading above the 200 day SMA which is an important medium term moving average, indicating positive bias in the medium 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 18200-17100 with mixed bias.
The weekly strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias. The trend deciding level for the day is 17660. If NIFTY trades above this level then we may witness a further rally up to 17830-18050-18220 levels. However, if NIFTY trades below 17660 levels then we may see some profit booking initiating in the market, which may correct up to 17435-17270-17045 levels.
Bank Nifty
Bank Nifty started the week on a positive note but witnessed selling at higher levels to end the week on weak note. Bank Nifty closed at 40345 with a loss of 2162 points on a weekly basis.
On the weekly chart the index has formed a Bearish candle which has totally engulfed its previous week's move forming a "Bearish Engulfing" candlestick formation which is a bearish pattern. The index had broken below 41600 which was a crucial support level. The chart pattern suggests that if Bank Nifty crosses and sustains above 40500 level it would witness buying which would lead the index towards 40800-41000 levels. However if index breaks below 40100 level it would witness selling which would take the index towards 39900-39600. Bank Nifty is now well placed above its 200-Day SMA indicating positive bias in the 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 41000-39600 with mixed bias.
The daily and weekly strength indicator RSI is in bearish mode and sustaining below 50 marks which supports bearish sentiments ahead
The trend deciding level for the day is 40635 If BANKNIFTY trades above this level then we may witness a further rally up to 41125-41905-42395 levels. However, if BANKNIFTY trades below 40635 levels then we may see some profit booking initiating in the market, it may correct up to 39855-39370-38590 levels.
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