Technical Outlook for the week starting November 25 by Lovelesh Sharma, Consultant, SAS Online – a deep discount broker
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Below the Quote on Technical Outlook by Lovelesh Sharma, Consultant, SAS Online – a deep discount broker
It was Adani group that came back in spotlight after almost a year and a half as US Court indicts it while this event pushed the Adani stocks 20-30% lower at the same time market recouped pairing the losses as 200 DMA worked like a charm. A negative sentiment coupled with this news-based event provided the right recipe for Nifty 50 to mark a short term rebound.
Below is the Equal weighted index of Adani group stocks and interestingly we are in for a consolidation again, at least that what charts tells us
Nifty
Now coming back to our Nifty50, a short-term bottom, exhaustion of bears at lower levels and 200 Days MA but does that mean it’s a bottom? Well, no, as we haven’t seen a renewed momentum in this one-day Friday rally.
Firstly, breadth tells us otherwise on the weekly chart, since the week ended positive but the number of stocks above their short to mid-term moving averages remain downward sloping, while on Daily chart, signals remain mixed. Secondly, the net new high to new low index is still not turned positive. So, a short covering? May be, but we would rather be cautious in approach.
Below is the Nifty 50 Daily chart
The Thrust indicator as well points to the same scenario on lower timeframe. The Price change lacks the breadth as indicators give mixed signals
Similarly we need a close above 24000 Mark as per price to move towards higher levels of 24240 - 24500 while a failure to do so will push Nifty to a sideways zone of 24250 - 23800.
BankNifty
The BankNifty on other hand is forming a Inverse triangle or a megaphone pattern where boundaries expand and price expands within the diverging trendlines. It is a price action with unusual whipsaws. RSI is in Neutral zone of 60 - 40 while the ADX is sideways indicating price to follow a zone.
Hence a cautious approach is rather required. As per price, BankNifty needs to close above 51300 to move in the zone of 52500 while on the downside support is at 50750 – 50800 which is acting as point of polarity.
We maintain Buy on dips on both indices as long as Nifty is above 23750 and BankNifty 50750. A close below this level will push prices lower.
Above views are of the author and not of the website kindly read disclaimer
