Hello all,
Previous week remained more or less flat on Indices and stock specific performance continued on either side. I had highlighted Nifty zone of 9300 to watch out for, which remained resistance for entire week. Let's look at present state of Indices.
There is no major change in formation. It is interesting to see that Nifty is still trading under the same Rising Wedge formation. In my previous week analysis, I had mentioned that "d" & even "e" may be done. But as week progressed, it seems that point "d" remains pending (yet to touch rising trend line support) and point "e" remains pending thereafter. RSI is moving sideways and still not completely giving away strength.
To make analysis bit more clear, I am including Bank nifty chart. Bank nifty has clearly underperformed in entire bounce.
Where Nifty has clearly managed to retrace till 38.2%, bank nifty is struggling in thrust. On formation front, point "c" is not even surpassing high of point "a", making it more like symmetrical triangle.
If I dive a bit more into the individual candle behaviour during entire formation, it seems that gap downs and bearish candles are more than bullish sentiments.
ASSUMPTION: I personally feel that both indices will complete their formations before falling further. That means I expect Nifty to bounce after making lower "d", to make potential point "e" on upside. That may take Nifty to approximate zone of 9500.
Meanwhile Bank nifty will complete symmetrical triangle by touching trendline support and resistance line to create point "d" (may be higher than 18700) and point "e" (may be lower than 21100). Under symmetrical triangle formation, Bank nifty may not surpass 21200-21400 zone.
APPROACH: Needless to say, our approach should be flexible enough because the present bounce is just a RETRACEMENT of entire fall. As soon as the breakdown comes through, we shall be ready to reap the benefit.
Crucial support zone:
Nifty @ 8900
Bank nifty @ 19000
Once crucial support zone is taken out, one should approach market with positional bearish view on further confirmation.
- Kunal Rambhia
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ReplyDeleteThere is no major change in formation. It is interesting to see that Nifty is still trading under the same Rising Wedge formation. In my previous week analysis, I had mentioned that "d" & even "e" may be done. But as week progressed, it seems that point "d" remains pending (yet to touch rising trend line support) and point "e" remains pending thereafter. RSI is moving sideways and still not completely giving away strength.
To make analysis bit more clear, I am including Bank nifty chart. Bank nifty has clearly underperformed in entire bounce.
Where Nifty has clearly managed to retrace till 38.2%, bank nifty is struggling in thrust. On formation front, point "c" is not even surpassing high of point "a", making it more like symmetrical triangle.