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Nifty

Nifty reacted to the union budget announcements as it dipped towards its psychological base of 24000 but recovered to re-established its closing base above its 20 DEMA support level of 24230, forming a ‘Bullish Hammer’ candlestick formation. A ‘Spinning Top’ formation followed by a ‘Bullish Hammer’ is a sign of confidence & hence a close above 24665 would mark the termination of the ongoing time & price correction. With the RSI displaying a breakdown and the ADX continuing to trend higher at 29, both of its trend strength indicators are diverging & display lack of conviction. Options data indicates a firm base at 24300 followed by 24000 while a move above 24500 would unlock a major short covering rally. Once the index trends above 24665 one can reestablish leverage longs with a stop below 24040. Until then expect consolidation within 24200-24500 zone ahead of the expiry day

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