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Nifty

Nifty started the week with an upward gap, and buying momentum for most of the week led it to close on a strong note. Nifty closed at 25236 on 30th August with a gain of 413 points on a weekly basis. On the weekly chart, the index has formed a bullish candle, forming a higher high-low compared to the previous week, and has closed above the previous swing high, indicating a positive bias. The index continues to move in a higher top and higher bottom formation on the weekly chart, indicating a positive bias in the medium term. The chart pattern suggests that if Nifty crosses and sustains above the 25350 level, it could witness buying, leading the index towards 25500-25700 levels. However, if the index breaks below the 25100 level, it could witness selling, taking the index towards 25000-24800. On the daily chart, Nifty sustaining above its 20, 50, 100, and 200-day SMAs indicates a positive bias in the short term. Nifty continues to remain in an uptrend in the medium term. Hence, 'Buying on Dips' continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 25700-24800 with a positive bias. The weekly strength indicator RSI is above its respective reference lines, indicating a positive bias. The trend-deciding level for the day is 25235. If Nifty trades above this level, we may witness a further rally up to 25270-25305-25340 levels. However, if Nifty trades below 25235, we may see some profit booking initiating in the market, which may correct Nifty down to 25200-25165-25130 levels.

Bank Nifty

Bank Nifty started the week on a flat note and remained in a narrow range (51466-50938) throughout the week, indicating a lack of strength on either side. Bank Nifty closed at 51351 on 30th August with a gain of 418 points on a weekly basis. On the weekly chart, the index has formed a small bullish candle with shadows on either side, indicating indecisiveness among participants regarding the direction. The index is moving in a higher top and higher bottom formation on the weekly chart, indicating a positive bias. The chart pattern suggests that if Bank Nifty crosses and sustains above the 51500 level, it could witness buying, leading the index towards 51750-52000 levels. However, if the index breaks below the 51000 level, it could witness selling, taking the index towards 50800-50600. Bank Nifty is trading below the 50-day SMA, which is an important short-term moving average, indicating a negative bias in the short term; however, it manages to sustain above the 100- and 200-day SMAs, which supports bullish sentiments in the medium to long term. Bank Nifty continues to remain in a downtrend in the short term. Hence, 'selling on rallies' continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 52000-50600 with a mixed bias. The weekly strength indicator RSI continues to remain flat, indicating the absence of strength. However, the momentum oscillator Stochastic has turned positive from the oversold zone, indicating a possible up move in the near term. The trend-deciding level for the day is 51360. If Bank Nifty trades above this level, we may witness a further rally up to 51460-51570-51670 levels. However, if Bank Nifty trades below 51360, we may see some profit booking initiating in the market, and it may correct down to 51250-51145-51040 levels.

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