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Nifty

Nifty opened sharply lower with a downward gap and traded with extreme volatility throughout the session to close on a negative note. Nifty closed at 16585 with a loss of 77 points.

On the daily chart the index has formed a "Doji" candlestick formation indicating indecisiveness amongst market participants regarding the direction. The index is moving in a Higher Top and Higher Bottom formation on the daily chart indicating a sustained up trend. The chart pattern suggests that if Nifty crosses and sustains above 16700 level it would witness buying which would lead the index towards 16800-16900 levels. However if the index breaks below 16500 level it would witness selling which would take the index towards 16400-16300. Nifty is trading above its 20 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 positive from the oversold territory and is above its reference line indicating positive bias. The trend deciding level for the day is 16600. If NIFTY trades above this level then we may witness a further rally up to 16675-16770-16845 levels. However, if NIFTY trades below 16600 levels then we may see some profit booking initiating in the market, which may correct up to 16505-16430-16340 levels.

Bank Nifty

Banknifty opened sharply lower with a downward gap and selling pressure throughout the session dragged it lower to close on a negative note. Banknifty closed at 35487 with a loss of 340 points.

On the daily chart the index has formed a sizable bearish candle and violated previous session's low indicating further weakness. 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 35600 level it would witness buying which would lead the index towards 35800-36100 levels. However if the index breaks below 35300 level it would witness selling which would take the index towards 35000-34300. Banknifty is trading above 20 day SMA's indicating positive bias in the short to medium 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 has turned positive from oversold and is above its reference line indicating sustained strength.

The trend deciding level for the day is 35555. If BANK NIFTY trades above this level then we may witness a further rally up to 35815-36145-36410 levels. However, if BANK NIFTY trades below 35555 levels then we may see some profit booking initiating in the market, which may correct up to 35225-34960-34630 levels.

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