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Nifty

Nifty started the week on a flat note and traded with extreme volatility on either side throughout the week. However Friday's sell-off dragged index lower to end near low's. Nifty closed at 16451 with a loss of 79 points on a weekly basis.

On the weekly chart the index has formed a Bearish candle with an upper shadow indicating selling at higher levels. This formation resembles to “Shooting Star” a short-term trend reversal pattern however any follow up close below 16376 may confirm above mentioned pattern. The chart pattern suggests that if Nifty crosses and sustains above 16500 level it would witness buying which would lead the index towards 16700-16800 levels. However if the index breaks below 16300 level it would witness selling which would take the index towards 16200-16000. Nifty is trading above the 20 and 50 day SMA which are important short term moving averages, indicating positive bias in the short term. Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 16600-16200 with mixed bias.

The weekly strength indicator RSI is above its respective reference lines indicating positive bias. The trend deciding level for the day is 16445. If NIFTY trades above this level then we may witness a further rally up to 16515-16580-16650 levels. However, if NIFTY trades below 16445 levels then we may see some profit booking initiating in the market, which may correct up to 16380-16310-16250 levels.

Banknifty

Bank Nifty started the week on a flat note however selling pressure throughout the week led the index to end on a weak note. Bank Nifty closed at 35034 with a loss of 1136 points on a weekly basis.

On the weekly chart the index has formed a long bearish candle forming lower High-Low compared to previous week and has closed below its low indicating weakness at current levels. Since the past three months, index is consolidating within 36300-34000 levels indicating short term consolidation. Hence any either side breakout will indicate further direction. The chart pattern suggests that if Bank Nifty crosses and sustains above 35300 level it would witness buying which would lead the index towards 35800- 36000 levels. However if index breaks below 34800 level it would witness selling which would take the index towards 34500-34000. Bank Nifty is trading below 20-day and 50-day SMA which are important short term moving averages, indicating negative bias in the short to medium term. Bank Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 35800-34000 with mixed bias.

The weekly strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias. However, momentum oscillator Stochastic has turned positive from the oversold zone indicating a possible consolidation or an up-move in the near term.

The trend deciding level for the day is 35090 If BANKNIFTY trades above this level then we may witness a further rally up to 35250-35470-35630 levels. However, if BANKNIFTY trades below 35090 levels then we may see some profit booking initiating in the market, it may correct up to 34870-34710- 34490 levels.

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