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Nifty

Nifty opened on a positive note and consolidated in the initial hour however selling pressure at higher levels dragged index lower to close near the day's low. Nifty closed at 19347 on 30th August with a gain of 5 points. On the daily chart the index has formed a bearish candle with upper shadow indicating selling pressure as well as resistance around 20 day daily SMA(19432).The index's inability to surpass the upper band of the descending channel at 19500 suggests a potential continuation of trading within a downward channel. The index continues to move in a lower top and lower bottom formation on the daily chart indicating negative bias in a short term. The chart pattern suggests that if Nifty crosses and sustains above 19400 level it would witness buying which would lead the index towards 19500-19600 levels. Important support for the day is around 19300 however if index sustains below 19300 then it may witness profit booking which would take the index towards 19200-19100 levels. Nifty is trading above 100 and 200 day SMA indicating positive bias in the medium term. Nifty continues to remain in a downtrend in the short term, so selling on rallies continues to be our preferred strategy. The daily RSI remains flat and above its reference line, suggesting a neutral momentum with consolidation. The trend deciding level for the day is 19380. If NIFTY trades above this level then we may witness a further rally up to 19420-19495-19540 levels. However, if NIFTY trades below 19380 levels then we may see some profit booking initiating in the market, which may correct up to 19305-19260-19185 levels.

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