Nifty opened on a negative note and traded with extreme volatility throughout the session - Axis Securities
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Nifty
Nifty opened on a negative note and traded with extreme volatility throughout the session. Nifty closed at 17207 with a loss of 70 points.
On the daily chart the index has formed a small bullish candle with shadows on either side representing extreme volatility as well as indecisiveness amongst participants regarding the direction. 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 17300 level it would witness buying which would lead the index towards 17400-17500 levels. However if index breaks below 17000 level it would witness selling which would take the index towards 16900-16800. Nifty is trading below its 20, 50 and 100- day SMA which indicates negative bias in the short term. Since the past four weeks index is consolidating within a broad range of 17800-16800 levels hence any either side breakout of range will signal further direction .
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 17210. If NIFTY trades above this level then we may witness a further rally up to 17350-17490-17630 levels. However, if NIFTY trades below 17210 levels then we may see some profit booking initiating in the market, which may correct up to 17070-16930-16790 levels
Banknifty
Banknifty opened with a downward gap and traded with extreme volatility on either side to close on a flat note. Banknifty closed at 37686 with a gain of 86 points.
On the daily chart the index has formed a small bullish candle with shadows on either side representing extreme volatility as well as indecisiveness amongst participants regarding the direction. Since the past 5-6 weeks, the index continues to consolidate in a broad trading range (39300-36500) representing a sideways trend. The chart pattern suggests that if Banknifty crosses and sustains above 37800 level it would witness buying which would lead the index towards 38000-38400 levels. However if index breaks below 37400 level it would witness selling which would take the index towards 37200-37000. Banknifty is trading below 20 and 50 day SMA indicating negative bias in the short to medium term. Banknifty continues to remain in an uptrend in the long term, so accumulation on dips and near major support zones continues to be our preferred strategy.
The daily and 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 37630. If BANK NIFTY trades above this level then we may witness a further rally up to 38110-38530-39005 levels. However, if BANK NIFTY trades below 37630 levels then we may see some profit booking initiating in the market, which may correct up to 37210-36735-36315 levels.
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