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Below the Quote on Weekly Technical Report September 14 by Shrey Jain, Founder & CEO, SAS Online - a deep discount broker

A Bullish Engulfing, Momentum Thrust and a New All Time high.
It’s all happening amid whipsaws and volatility as the Bullish engulfing pattern forms on the weekly chart of Nifty50 marks the 24800 – 24900 levels as the point of polarity for the upward trend. A bullish engulfing pattern and the price level where it forms simply indicate presence of the bulls at those levels and all the selling pressure, we have witnessed in last week was absorbed.

Secondly, the momentum thrust we have seen is another indication that upward momentum from lower levels of 24800 – 24900 can be extended further on the upside. The similar patter has given a sustainable shift in the last few months and similar has been witnessed on the last trading day of the week. So, we may see some sideways correction but it is evident that 25000 – 25100 will now be the area where renewed buying can be expected.

Refer to the attached chart below with highlighted box.

The Breadth improved with a new All time high indicates the seasonality effect of September for now is subdued while Nifty treads to new ATH. The number of stocks above key moving averages on daily basis has seen an uptick while the net new highs as well witnessed an uptick for three consecutive days, as both indicators are shown in chart below

The Resistance and Support.

We will follow the simple characteristics of technical analysis i.e. point of polarity. The previous Ath which was formed at 25080 – 25040 should act as an immediate support given the momentum will cool off and some sideways price action can be expected in range of 25350 – 25100. Adding to that, on upside the 25600 – 25700 will act as a resistance based on the amplitude and coincides with the Fib extension of 1.618 recent down move in September first week.

BankNifty continues to underperform with selective stocks performing well and hence any renewed breadth in banking stocks can push BankNifty higher. The resistance for BankNifty is at 52200 – 52300, above that, the resistance is placed at 53000. On Downside, any dip to 51600 – 51400 will act as a strong support.  Below is the chart of BankNifty.

The sectoral analysis points to extended up move in FMCG, Pharma, Media, Cement and Finance while we expect coming week the strength can be seen in power and Banking stocks.

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