Nifty: It was quite sluggish week as Nifty index traded within a range of nearly 100 points and eventually concluded the week with a nominal loss of 0.52%.
- The previous week shooting star candle mentioned in our eariler update was confirmed as index ended below the previous week low of 9188.10.
- On the contrarian side, previously we had mentioned the ‘Bearish Divergence’ formed on daily chart, and now due to recent pullback; we are seeing formation of Positive Reversal.
- The said formation occurred near 50% retracement of its recent daily swing move. Also, we are seeing Top Bottom support.
- Considering the above technical evidences, we believe the recent correction was just a pullback and expect the primary trend to resume. On lower side, 9109 will act as an immediate support below which the strong support placed near 9019 which coincides with the daily swing low whereas on higher side, the recent high of 9274 will act as an immediate resistance above which Nifty likely to rally towards 9350.
Bank Nifty: After series of sideways sessions, Bank Nifty eventually resumed its uptrend and hit another record high of 21787.10. Subsequently, the sideways momentum was seen during the second half. In the process, index eventually outperformed the Nifty by gaining 1.19% over its previous week close.
- On a weekly chart, we are seeing another narrow range candle indicates some bit of indecisiveness.
- On a daily chart, the RSI (14) is still trading below the ‘Bearish Divergence’ trend line.
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- At present, the broader trend is still up hence traders are advised not to pre-empt any corrective move and concentrate on stock specific trades. In coming week, Bank Nifty has an immediate resistance near 21880 and any move above that will drive index further higher till 22080 which coincides with the weekly pivot high and monthly upper pivot. On lower end, 21490 will act as an immediate support below which the next support comes near 21395 - 21145 levels respectively.
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