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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 levels recovered some of the earlier losses. Nifty closed at 19436 on October 4th with a loss of 93 points.

On the daily chart, the index formed a bullish candle with a lower shadow indicating buying at lower levels. The index found support at the lower Bollinger band and formed a “long legged Doji” candle pattern for a day. The chart pattern suggests that if Nifty crosses and sustains above the 19450 level, it would witness buying, leading the index towards 19500-19600 levels. The important support for the day is around 19400. However, if the index sustains below 19400, it may witness profit booking, taking the index towards 19300-19200 levels. Nifty is trading above the 100 and 200- day SMAs, indicating a positive bias in the medium term. Nifty continues to remain in an uptrend for the medium term, so buying on dips continues to be our preferred strategy.

The daily strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias short term.

The trend deciding level for the day is 19410. If NIFTY trades above this level then we may witness a further rally up to 19485-19535-19610 levels. However, if NIFTY trades below 19410 levels then we may see some profit booking initiating in the market, which may correct up to 19360-19285-19235 levels

Banknifty  

Banknifty opened sharply lower with a downward gap, and selling pressure throughout the session dragged it lower to close on a negative note. Banknifty closed at 43964 on October 4th with a loss of 435 points

On the daily chart, the index formed a bearish candle with a lower High-Low compared to the previous session and also closed below the previous session’s low, indicating further weakness. The index broke below the upward sloping trendline, indicating weakness in Banknifty. The chart pattern suggests that if Banknifty crosses and sustains above the 44150 level, it would witness buying, leading the index towards 44250-44350 levels. The important support for the day is around 43800. However, if the index sustains below 43800, it may witness profit booking, taking the index towards 43700-43600 levels. Banknifty is trading below the 20, 50, and 100-day SMAs, indicating a negative bias in the short term. Banknifty continues to remain in an uptrend in the medium and long term, so buying on dips continues to be our preferred strategy.

The daily strength indicator RSI is moving downwards and is quoting below its reference line, indicating a negative bias in a short term.

The trend deciding level for the day is 43995. If BANK NIFTY trades above this level then we may witness a further rally up to 44130-44300-44435 levels. However, if BANK NIFTY trades below 43995 levels then we may see some profit booking initiating in the market, which may correct up to 43825-43690-43525 levels.

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