Technical Picks: Nifty, Bank Nifty
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Nifty: Despite, the concluding week of year, we witnesseddecent volatility in our market. During the week, Nifty opened lower and breached the crucial support of 7916 however the bulls showed tremendous resilience which resulted into spectacular recovery during the remaining part of the week. In the process, Nifty concluded the week with a decent gain of 2.51%. Looking at the weekly chart, last week price action resulted into a formation of Bullish Engulfing pattern. The said pattern precisely occurred near 50% Fibonacci retracement of its entire move from the bottom of 6825.80 to 8968.70. Also, this level was coincided with the Top Bottom support (pls. find the horizontal line). The weekly RSI (14) has precisely found support near 40 marks and started moving northward. Looking at the monthly chart, the candle of December month resembles Bullish Hammer pattern. The said pattern will be activated once Nifty start sustaining above 8275. Going forward, 8275 / 8300 zone will act an immediate resistance which coincided with the daily 89- EMA and the Downward sloping trend line any decisive move above this level will drive Nifty higher towards 8460. On the flip side, last week low of 7893.80 has set a strong foundation any break below this level will trigger fresh sell-off in market whereas immediate support comes near 8020.
Bank Nifty: Last week, Nifty Bank index opened lower with a down side gap and precisely tested the weekly 89-EMA mentioned in our previous report. The said indicator proved its significance and we saw decent recovery during the remaining part of the session. In the process, Bank Nifty concluded the week with a gain of 1.64%. Last week price action resulted into a formation of Bullish Piercing pattern. The said pattern occurred precisely at weekly 89-EMA therefore such pattern can’t be overlooked. Looking at the weekly chart, during its previous week, Bank Nifty ended inside the Top Bottom support zone (pls. find the horizontal line). However, last week index rebound sharply hence we would like to wait for some more development. Going forward, last week low of 17606 will act as an immediate support and any break below this level will resume the ongoing correction and Bank Nifty will correct till 17420. On the other side, 18500 / 18740 are the resistance level for coming trading session.
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