Banknifty opened with a downward gap and traded with positive bias in initial hours however selling pressure - Axis Securities
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Nifty
Nifty opened with a downward gap and traded with positive bias in initial hours however selling pressure throughout the session led it to close near the day's low. Nifty closed at 17899 with a loss of 101 points.
On the daily chart the index has formed a bearish candle with long upper shadow indicating selling pressure as well as resistance at higher levels. The index is moving in a Lower Top and Lower Bottom formation on the hourly chart indicating negative bias. The chart pattern suggests that if Nifty crosses and sustains above 17950 level it would witness buying which would lead the index towards 18000-18100 levels. However if index breaks below 17850 level it would witness selling which would take the index towards 17800-17700. 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 17935. If NIFTY trades above this level then we may witness a further rally up to 17990-18075-18130 levels. However, if NIFTY trades below 17935 levels then we may see some profit booking initiating in the market, which may correct up to 17845-17790-17700 levels.
Banknifty
Banknifty opened with a downward gap and traded with positive bias in initial hours however selling pressure throughout the session led it to close near the day's low. Banknifty closed at 38042 with a loss of 266 points.
On the daily chart the index has formed a bearish candle with long upper shadow indicating selling pressure as well as resistance at higher 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 38200 level it would witness buying which would lead the index towards 38500-38700 levels. However if index breaks below 37950 level it would witness selling which would take the index towards 37700-37400. Banknifty is trading below 20-day and 50-day SMA indicating negative bias in the short to medium term. Banknifty continues to remain in a downtrend in the short to medium term, so selling on rallies 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 38160. If BANK NIFTY trades above this level then we may witness a further rally up to 38340-38635-38815 levels. However, if BANK NIFTY trades below 38160 levels then we may see some profit booking initiating in the market, which may correct up to 37865-37685-37390 levels.
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