Banknifty opened with a downward gap and traded with extreme volatility - Axis Securities
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Nifty
Nifty opened with a downward gap and traded with extreme volatility on either side and witnessed short covering at the end of the day. Nifty closed at 14359 with a loss of 258 points.
On the daily chart the index has formed a Bullish candle with a lower shadow indicating buying at lower levels. The index is moving in a Lower Top and Lower Bottom formation on the daily chart indicating negative bias. The chart pattern suggests that if Nifty crosses and sustains above 14400 level it would witness buying which would lead the index towards 14600-14800 levels. However if index breaks below 14250 level it would witness selling which would take the index towards 14100-14000. Nifty is trading below 20 day SMA indicating negative bias in the short to medium term. Nifty continues to remain in an uptrend in the medium and long term, so buying on dips continues to be our preferred strategy
The daily strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias.
The trend deciding level for the day is 14310. If NIFTY trades above this level then we may witness a further rally up to 14430-14500-14620 levels. However, if NIFTY trades below 14310 levels then we may see some profit booking initiating in the market, which may correct up to 14240-14120-14050 levels
Banknifty
Banknifty opened with a downward gap and traded with extreme volatility on either side and witnessed short covering at the end of the day. Banknifty closed at 31208 with a loss of 769 points.
On the daily chart the index has formed a Bearish candle with a lower shadow indicating buying at lower levels. The index is moving in a Lower Top and Lower Bottom formation on the daily chart indicating negative bias. The chart pattern suggests that if Banknifty crosses and sustains above 31500 level it would witness buying which would lead the index towards 32000-32500 levels. Important Supports for the day is around 31000 However if index sustains below 31000 then it may witness profit booking which would take the index towards 30500-30000 levels. Banknifty is trading below 20 and 50 day SMA's which indicating negative bias in the short term. Banknifty continues to remain in an uptrend in the medium and long term, so buying on dips continues to be our preferred strategy.
The daily strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias.
The trend deciding level for the day is 30975. If BANK NIFTY trades above this level then we may witness a further rally up to 31540-31870-32440 levels. However, if BANK NIFTY trades below 30975 levels then we may see some profit booking initiating in the market, which may correct up to 30640-30075-29745 levels
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