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Nifty

Nifty opened sharply lower with a downward gap and extended selling momentum in the first half however buying momentum at lower led index to close near the day's high. Nifty closed at 16013 with a gain of 150 points. On the daily chart index has formed a bullish candle and has closed above its previous session’s high indicating positive bias. With the past couple of session’s price action, the index has formed an “Engulfing Bullish” – a short term trend reversal pattern indicating bounceback rally in the near term. The chart pattern suggests that if Nifty crosses and sustains above 16050 level it would witness buying which would lead the index towards 16200-16300 levels. However if the index breaks below 15900 level it would witness selling which would take the index towards 15800-15700. Nifty is trading below its 50, 100, and 200-day SMA which indicates 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. 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 15905. If NIFTY trades above this level then we may witness a further rally up to 16140-16260-16495 levels. However, if NIFTY trades below 15905 levels then we may see some profit booking initiating in the market, which may correct up to 15780-15545-15425 levels.

Banknifty

Banknifty opened lower with a downward gap and extended selling momentum in the first half however buying momentum at lower levels led it to close near the day’s high. Banknifty closed at 33158 with a gain of 287 points. On the daily chart the index has formed a Bullish candle with a lower shadow indicating buying at lower levels. The index is moving in a Lower Top and Lower Bottom formation on the daily chart indicating short term trend down trend. The chart pattern suggests that if Banknifty crosses and sustains above 33300 levels it would witness buying which would lead the index towards 33500-34000 levels. However if index breaks below 33000 level it would witness selling which would take the index towards 32800-32500. Banknifty is trading below 20, 50 and 100 day SMA's which indicate 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 and weekly strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias. The trend deciding level for the day is 32860. If BANK NIFTY trades above this level then we may witness a further rally up to 33565-33965-34670 levels. However, if BANK NIFTY trades below 32860 levels then we may see some profit booking initiating in the market, which may correct up to 32455-31750-31345 levels.

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