Nifty started the week on a negative note and traded with extreme volatility on either side throughout the week - Axis Securities
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Nifty
Nifty started the week on a negative note and traded with extreme volatility on either side throughout the week. Nifty closed at 17004 with a gain of 19 points on a weekly basis.
On the weekly chart the index has formed a small bullish candle with shadows on either side indicating indecisiveness amongst participants regarding the direction. The index is moving in a Lower Top and Lower Bottom formation on the daily chart indicating negative bias. The chart pattern suggests that if Nifty crosses and sustains above 17200 level it would witness buying which would lead the index towards 17300-17500 levels. However if the index breaks below 16900 level it would witness selling which would take the index towards 16700-16600. Nifty is trading below 20, 50 and 100 day SMA's which are important short term moving averages, indicating negative bias in the short to medium term. Nifty continues to remain in a downtrend in the short to medium term, so selling on rallies continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 17300-16800 with mixed bias.
The weekly strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias. However on the daily chart, it has turned bullish representing bounce back rally
The trend deciding level for the day is 17025. If NIFTY trades above this level then we may witness a further rally up to 17135-17270-17380 levels. However, if NIFTY trades below 17025 levels then we may see some profit booking initiating in the market, which may correct up to 16890-16775-16645 levels.
Banknifty
Bank Nifty started the week on a negative note and remained extremely volatile on either side throughout the week. Bank Nifty closed at 34857 with a loss of 762 points on a weekly basis.
On the weekly chart the index has formed a small Bearish candle with shadows on either side indicating indecisiveness amongst participants regarding the direction. The index is moving in a Lower Top and Lower Bottom formation on the daily chart indicating negative bias. The chart pattern suggests that if Bank Nifty crosses and sustains above 35500 level it would witness buying which would lead the index towards 36000-36500 levels. However if index breaks below 34500 level it would witness selling which would take the index towards 34300- 34000. On the daily chart, Bank Nifty is now sustaining below its 50, 100 and 200 day SMA indicating negative bias in the short term. Bank Nifty continues to remain in a downtrend in the short to medium term, so selling on rallies continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 36500- 34500 with mixed bias.
The daily and weekly strength indicator RSI is in negative terrain and are below their respective reference lines indicating negative bias.
The trend deciding level for the day is 34925 If BANKNIFTY trades above this level then we may witness a further rally up to 35260-35665-36005 levels. However, if BANKNIFTY trades below 34925 levels then we may see some profit booking initiating in the market, it may correct up to 34520-34180-33775 levels.
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