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Nifty

Nifty opened sharply lower with a downward gap however buying at lower levels recovered most of the losses to close on a flat note. Nifty closed at 18017 with a loss of 27 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 continues to move in a Higher Top and Higher Bottom formation on the hourly chart indicating positive bias. The chart pattern suggests that if Nifty crosses and sustains above 18100 level it would witness buying which would lead the index towards 18200- 18300 levels. However if the index breaks below 17950 level it would witness selling which would take the index towards 17900-17800. 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 continues to remain flat and is below its reference line indicating absence of momentum on either side

The trend deciding level for the day is 18000. If NIFTY trades above this level then we may witness a further rally up to 18080-18145-18225 levels. However, if NIFTY trades below 18000 levels then we may see some profit booking initiating in the market, which may correct up to 17935-17850-17790 levels.

Banknifty

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 39023 with a loss of 346 points.

On the daily chart, the index has formed a bearish candle forming lower High-Low compared to previous session and has also closed below previous session's low indicating further weakness. The index continues to move in a Lower Top and Lower Bottom formation on the hourly chart indicating negative bias. The chart pattern suggests that if Banknifty crosses and sustains above 39200 level it would witness buying which would lead the index towards 39400-39600 levels. However if index breaks below 38900 level it would witness selling which would take the index towards 38700-38500. Banknifty is trading below its 20 day SMA which indicates negative bias in the short 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 39040. If BANK NIFTY trades above this level then we may witness a further rally up to 39205-39385-39550 levels. However, if BANK NIFTY trades below 39040 levels then we may see some profit booking initiating in the market, which may correct up to 38860-38695-38510 levels.

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