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Nifty

Nifty started the week on a positive note but witnessed selling at higher levels, ending the week on a weak note. Nifty closed at 22055 on 10th May with a loss of 421 points on a weekly basis. On the weekly chart, the index has formed a long bearish candle, forming a lower high-low compared to the previous week, indicating weakness at current levels. Since the past 10-12 weeks, the index has been consolidating within the range of 22800-21700 levels, indicating short-term consolidation. Hence, any breakout on either side will indicate further direction. The chart pattern suggests that if Nifty crosses and sustains above the 22150 level, it would witness buying, leading the index towards 22300-22500 levels. However, if the index breaks below the 21900 level, it would witness selling, taking the index towards 21700-21500. Nifty is trading below the 20 and 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, supporting bullish sentiments in the medium to long term. 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 Nifty to trade in the range of 22500-21500 with a negative bias. The weekly strength indicator RSI is moving downwards and is quoting below its reference line, indicating a negative bias. The trend-deciding level for the day is 22045. If NIFTY trades above this level, we may witness a further rally up to 22140-22225-22320 levels. However, if NIFTY trades below 22045 levels, we may see some profit booking initiating in the market, which may correct NIFTY up to 21960-21865-21780 levels.

Bank Nifty

Bank Nifty started the week on a positive note but witnessed selling at higher levels to end the week on a weak note. Bank Nifty closed at 47421 on 10th May with a loss of 1502 points on a weekly basis. On the weekly chart, the index has formed a long bearish candle, forming a lower high-low compared to the previous week, and has closed below its low, indicating weakness at current levels. The index continues to move in a higher top and higher bottom formation on the daily chart, indicating a positive bias in a medium term. The chart pattern suggests that if Bank Nifty crosses and sustains above the 47600 level, it would witness buying, leading the index towards 47850-48000 levels. However, if the index breaks below the 47300 level, it would witness selling, taking the index towards 47000-46700. Bank Nifty is trading below 20 and 50-Day SMAs, which are important short-term moving averages, indicating a negative bias in the short term; however, it manages to sustain above 100 and 200-Day SMAs, which support 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 48000-46700 with a negative bias. The weekly strength indicator RSI is moving downwards and quoting below its reference line, indicating a negative bias. The trend-deciding level for the day is 47535. If BANKNIFTY trades above this level, we may witness a further rally up to 47755-48090-48310 levels. However, if BANKNIFTY trades below 47535 levels, we may see some profit booking initiating in the market, and it may correct up to 47200-46980-46645 levels.

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