Technical Picks: Nifty, Bank Nifty
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Nifty: Last week, four out of five trading sessions Nifty ended inside the negative territory which clearly indicates the bears had an upper hand. During the week, Nifty confirmed its break down from Rising Wedge which triggered further pessimism. In line with the expectation, the selling pressure accelerated and Nifty sink lower. The pace of sell-off was so sharp that Nifty couldn’t hold the immediate support of 8056 and eventually ended the week below 8000 psychological mark. In the process, Nifty concluded the week with a loss of 1.89 percent. Looking at the weekly chart, the move from the bottom of 7916 to 8275 can be considered as a normal pullback after a sharp fall and now Nifty is likely resume its down trend. The weekly 9-EMA has negatively crossed the 45- EMA which doesn’t augur well. Going forward, 7916 which coincided with the recent swing low along with the multiple support point will act as an immediate support and any break below this level will put further pressure on Nifty. In that case Nifty will slide lower towards 7810 / 7715 level respectively. On the up side, 8087 will act as an immediate resistance above which the next resistance is placed at 8155 level respectively.
Bank Nifty: After a broad consolidation for more than three weeks, Bank Nifty eventually confirmed its direction by breaching the strong support of 17950. During the week, Bears made several attempts to break the said support zone and succeed during the second half of the week. As Bank Nifty opened lower with a gap and convincingly breached 17950. In the process, Bank Nifty closed at lowest level since July 01, 2016 on weekly chart and lost 2.34 percent. Looking at the daily chart, Bank Nifty has convincingly breached the 200-SMA also the 9-EMA of RSI (14) went below 40 marks which doesn’t augur well in the near term. Going forward, we maintain our cautious view and expect Bank Nifty to test the weekly 89-EMA placed at 17600 any sustain move below this level will drag the index further lower towards 17420. On the other side, 18070 / 18200 zone will act as a strong resistance. Any sustain move above this zone will lead to further pullback towards 18530.
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