Nifty opened lower with a downward gap and observed profit booking - Axis Securities
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Nifty
Nifty opened lower with a downward gap and observed profit booking in the first half however buying support at lower levels pulled the index higher to close near the day's high. Nifty closed at 17578 with a gain of 87 points.
On the daily chart index has formed a bullish candle and has closed near the day's high indicating positive bias. The index is moving in a Higher Top and Higher Bottom formation on the daily chart indicating an uptrend. The chart pattern suggests that if Nifty crosses and sustains above 17700 level it would witness buying which would lead the index towards 17800-17900 levels. However if index breaks below 17500 level it would witness selling which would take the index towards 17400-17300. Nifty is trading above its 20, 50 , 100 and 200 day SMA which indicates positive bias in the short term. Nifty continues to remain in an uptrend for the short term, so buying on dips continues to be our preferred strategy.
The daily strength indicator RSI has turned negative from the overbought territory and is below its reference line indicating profit booking.
The trend deciding level for the day is 17515. If NIFTY trades above this level then we may witness a further rally up to 17685-17795-17965 levels. However, if NIFTY trades below 17515 levels then we may see some profit booking initiating in the market, which may correct up to 17405-17235-17125 levels.
Banknifty
Banknifty opened lower with a downward gap and witnessed profit booking in the first half however buying momentum at lower levels pulled the index higher to close near the day's high. Banknifty closed at 38698 with a gain of 400 points.
On the daily chart index has formed a bullish candle and has closed above its previous session's high representing positive bias ahead. The index is moving in a Higher Top and Higher Bottom formation on the daily chart indicating a short term up trend. The chart pattern suggests that if Banknifty crosses and sustains above 38900 level it would witness buying which would lead the index towards 39200-39400 levels. However if index breaks below 38500 level it would witness selling which would take the index towards 38200-38000. Banknifty is trading above 20, 50 , 100 and 200 day SMA indicating positive bias in the short to medium term. Banknifty continues to remain in an uptrend in the short 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 38505. If BANK NIFTY trades above this level then we may witness a further rally up to 39060-39425-39980 levels. However, if BANK NIFTY trades below 38505 levels then we may see some profit booking initiating in the market, which may correct up to 38140-37585-37225 levels.
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