Nifty opened with a downward gap and traded with extreme volatility on either side and witnessed short covering at the end of the day - Axis Securities
Nifty
Nifty opened with a downward gap and traded with extreme volatility on either side and witnessed short covering at the end of the day. Nifty closed at 15752 with a loss of 171 points.
On the daily chart the index has formed a "Doji" candlestick formation indicating indecisiveness amongst market participants regarding the direction. Since past four-five weekly sessions index continue to consolidate in a broad trading range (15600-15900) representing sideways trend. The chart pattern suggests that if Nifty crosses and sustains above 15800 level it would witness buying which would lead the index towards 15900-16100 levels. However if index breaks below 15700 level it would witness selling which would take the index towards 15600-15500. 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 has turned negative from the overbought territory and is below its reference line indicating sustained downtrend.
The trend deciding level for the day is 15765. If NIFTY trades above this level then we may witness a further rally up to 15825-15895-15955 levels. However, if NIFTY trades below 15765 levels then we may see some profit booking initiating in the market, which may correct up to 15695-15635-15565 levels
Banknifty
Banknifty opened with a downward gap and traded with extreme volatility on either side and witnessed short covering at the end of the day.. Banknifty closed at 35079 with a loss of 673 points.
On the daily chart the index has formed a small Bullish candle with upper shadow indicating selling pressure as well as resistance at higher levels. Since past four-five sessions index continue to consolidate in a broad trading range (36000-34600) representing sideways trend. The chart pattern suggests that if Banknifty crosses and sustains above 35499 level it would witness buying which would lead the index towards 36000-36500 levels. Important Supports for the day is around 34500 However if index sustains belwo 34500 then it may witness profit booking which would take the index towards 34000-33600 levels.. Banknifty is trading below 20 day SMA indicating negative 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 is moving downwards and is quoting below its reference line indicating negative bias.
The trend deciding level for the day is 35110. If BANK NIFTY trades above this level then we may witness a further rally up to 35320-35555-35765 levels. However, if BANK NIFTY trades below 35110 levels then we may see some profit booking initiating in the market, which may correct up to 34870-34660-34420 levels
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