Nifty opened with a downward gap and remained extremely volatile on either side - Axis Securities
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Nifty
Nifty opened with a downward gap and remained extremely volatile on either side. Nifty closed at 17746 with a loss of 179 points.
On the daily chart the index has formed a bearish candle with either side shadows indicating volatility throughout the session. 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 17800 level it would witness buying which would lead the index towards 17900-18000 levels. However if the index breaks below 17700 level it would witness selling which would take the index towards 17600-17500. 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 is moving upwards and is above its reference line indicating positive bias.
The trend deciding level for the day is 17735. If NIFTY trades above this level then we may witness a further rally up to 17810-17875-17955 levels. However, if NIFTY trades below 17735 levels then we may see some profit booking initiating in the market, which may correct up to 17670-17590-17525 levels.
Bank Nifty
Banknifty opened with a downward gap and traded with extreme volatility on either side to close on a negative note. Banknifty closed at 37490 with a loss of 206 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 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 37600 level it would witness buying which would lead the index towards 37800-38200 levels. However if the index breaks below 37400 level it would witness selling which would take the index towards 37200-36900. Banknifty is trading above its 200 day SMA (35728) which indicates positive bias in the short term. Banknifty continues to remain in an uptrend in the long term, so accumulation on dips and near major support zone continues to be our preferred strategy.
The daily strength indicator RSI is moving upwards and is above its reference line indicating positive bias.
The trend deciding level for the day is 37435. If BANK NIFTY trades above this level then we may witness a further rally up to 37810-38130-38505 levels. However, if BANK NIFTY trades below 37435 levels then we may see some profit booking initiating in the market, which may correct up to 37115-36740-36420 levels.
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