Nifty opened on a positive note and extended buying momentum in the initial hour however selling pressure - Axis Securities
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Nifty
Nifty opened on a positive note and extended buying momentum in the initial hour however selling pressure at higher levels dragged index lower to close near the day's low. Nifty closed at 16215 with a loss of 51 points.
On the daily chart the index has formed a bearish candle with a long upper shadow indicating selling pressure as well as resistance at higher levels. Since past 10-12 session’s indexes continue to consolidate in a broad trading range (16500-15700) representing sideways trend. The chart pattern suggests that if Nifty crosses and sustains above 16300 levels it would witness buying which would lead the index towards 16500-16600 levels. However if the index breaks below 16100 level it would witness selling which would take the index towards 16000-15800. Nifty is trading below its 20, 50, 100, and 200-day SMA which indicates negative bias in the short to medium term. Nifty 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 has turned positive from the oversold territory and is above its reference line indicating positive bias.
The trend deciding level for the day is 16270. If NIFTY trades above this level then we may witness a further rally up to 16360-16500-16585 levels. However, if NIFTY trades below 16270 levels then we may see some profit booking initiating in the market, which may correct up to 16130-16045-15900 levels.
Bank Nifty
Banknifty opened lower with a downward gap and extended selling momentum in the first half however buying momentum at lower levels erased some of the earlier losses. Banknifty closed at 34248 with a loss of 29 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. Since past couple of weeks, the index continue to consolidate in a broad trading range (34800- 33000) representing sideways trend. The chart pattern suggests that if Banknifty crosses and sustains above 34400 levels it would witness buying which would lead the index towards 34600-34800 levels. However if index breaks below 34000 level it would witness selling which would take the index towards 33800- 33600. Banknifty is trading below 20, 50, 100 and 200 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 has turned positive from oversold and is above its reference line indicating sustained strength.
The trend deciding level for the day is 34395. If BANK NIFTY trades above this level then we may witness a further rally up to 34675-35100-35375 levels. However, if BANK NIFTY trades below 34395 levels then we may see some profit booking initiating in the market, which may correct up to 33970-33690-33265 levels.
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