Nifty shows improvement, overall chart structure remains negative

Nifty started on the positive side as there was a considerable opening gap in the market. Nifty moved above the 9,000 mark, but was unsuccessful in remaining consistent at the higher levels and corrected sharply by more than almost five hundred points from the intraday high.

The opening gap was filled up by the index, and the session concluded with a marginal gain. After hitting the lowest on Monday, the index bounced back fiercely in the last three sessions, covering most of its intra-week losses. Nifty finished the week with a drop of around 1 percent, hence, forming a bullish candle on the weekly scale.

The general chart formation is still negative, but after a significant decline in the past few weeks, a pullback move of the current corrective phase cannot be completely ruled out. So, till the time Nifty is consistently above 8,300 level, there is a possibility of a bounce-back towards the next resistance at 9,000 and then, 9,200 levels, while the supports are currently placed at 8,300 and 8,000 levels. Nifty managed to move up by 1.81% by continuing its great performance against the benchmark index for the third consecutive session but, it also witnessed a correction towards the 19,600 levels after successfully making an intraday high of 21,462 unaffected by the announcement by RBI of 75bps repo rate cut.

Even though the index closed-ended the week with a loss of 1.72%, it still managed to form a green body candle with big wicks on the overall weekly chart. We may predict an upcoming bounce back move as the RSI oscillator is rebounding from the oversold territory on a daily basis. However, the higher degree chart formation is still under pressure, and this bounce-back move is just a pullback move aimed at a broader correction of the market.

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