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Nifty

Nifty opened sharply lower with a downward gap, and further selling pressure throughout the session dragged it lower to close on a negative note. Nifty closed at 21885 on 4th June, marking a loss of 1379 points. On the daily chart, the index has formed a sizable bearish candle, creating a lower High-Low, and has also closed below the previous session's low, indicating further weakness. The index broke below upward sloping channel indicating further weakness. The chart pattern suggests that if Nifty crosses and sustains above 22000 level it would witness buying which would lead the index towards 22200-22400 levels. Important Supports for the day is around 21800 However if index sustains below 21800 then it may witness profit booking which would take the index towards 21600-21500 levels. Nifty is trading below its 20, 50 and 100 days SMAs, indicating a negative bias in the short to medium term. Nifty continues to remain in a downtrend in the short term, so exiting on small pullback rallies remains our preferred strategy. The daily strength indicator RSI has turned negative from the overbought territory and is below its reference line, indicating sustained downtrend. The trend-deciding level for the day is 22115. If NIFTY trades above this level, we may witness a further rally up to 22950-24015-24845 levels. However, if NIFTY trades below 22115 levels, we may see some profit booking initiating in the market, which may correct NIFTY up to 21050-20215-19155 levels.

Bank Nifty

Bank Nifty opened sharply lower with a downward gap, and selling pressure throughout the session dragged it lower to close on a negative note. Bank Nifty closed at 46929 on 4th June, with a loss of 4051 points. On the daily chart, the index has formed a bearish candle, creating a lower high-low compared to the previous session, and has also closed below the previous session's low, indicating further weakness. The index broke below upward sloping channel, indicating further weakness, however it took a support at 200 SMA. The chart pattern suggests that if Bank Nifty crosses and sustains above the 47200 level, it would witness buying, leading the index towards the 47400-47500 levels. Important support for the day is around 46800; however, if the index sustains below 46800, it could witness profit booking, leading the index towards the 46500-46300 levels. Bank Nifty is trading below the 20, 50 and 100 day SMAs, indicating a negative bias in the short term. Bank Nifty continues to remain in a downtrend in the short term, so exiting on small pullback rallies remains our preferred strategy. The daily strength indicator RSI has turned negative from the overbought territory and is below its reference line, indicating a sustained downtrend. The trend-deciding level for the day is 47890. If Bank Nifty trades above this level, we may witness a further rally up to the 49705-52480-54295 levels. However, if Bank Nifty trades below 47890, we may see some profit booking initiating in the market, which may correct Bank Nifty down to the 45115-43300-40525 levels.

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