The range for the Nifty is extended on both sides; on the higher end of prices closes above 17450 levels then 17700 will be the next level to watch out for.
By Rohan Patil
Last week Nifty saw a very narrow range where prices traded within the limited range band of 17000 – 17300 and formed a small consolidation hub near the range. Not much progress has been seen compared to its previous week’s close and we ended marginally lower with closing below 17200 levels. We have seen an almost 1700 points rally in just two weeks so we are expecting a cooling down in the volatility and prices may trade within the narrow range until and unless some positive news flow does not get triggered.
Prices on the daily chart have filled its continuation gap formed on March 17 and have found strong support near its 50 per cent retracement from its previous fall which is placed near 17000 levels. The volatility indicator India VIX is stuck in a broad range of 20.75 to 25 for the past few days. VIX needs to settle below 20 levels on the daily chart to witness some cool off in the volatility.
The range for the Nifty is extended on both sides; on the higher end of prices closes above 17450 levels then 17700 will be the next level to watch out for. On the flip side, 17000 levels are currently acting as immediate support for the index, if prices drift below this level then 16800 will be tested again on the lower side.
Bank Nifty outlook
On the daily chart Bank Nifty index has witnessed a gap down opening on March 24 and left that gap unfilled which will act as immediate resistance for the index. On the weekly scale, prices are hovering near its 21- week exponential moving average which is currently placed at 35595 levels.
On the daily scale prices are showing a negative stance as the banking index is closed below its important exponential averages. The momentum oscillator RSI (14) is reading below 50 levels on the daily as well as a weekly chart. The Banking index has also given an upward rising trend line breakdown on the daily chart and has closed below the same.
On the higher side, 36800 is acting as a strong resistance for the Bank Nifty, if prices close above that level then there will be a breakout in the banking index. Meanwhile the immediate support for the banking index is placed at 34300 levels.
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The prices were trading in a rectangle pattern for the past six months and have formed a trend line resistance at 306 levels.
DELTACORP has broken out of a rectangle pattern at 312.75 levels on 21st March and the prices have registered a decisive breakout that suggests a change in the trend from sideways to upside. Stock is trading above its 21, 50 & 100 – day exponential moving averages on the daily time frame, which is positive for the prices in the near term.
The MACD indicator is reading above its centerline with a positive crossover above its signal line. Momentum oscillator RSI (14) is reading above 60 levels and has given a horizontal trend line breakout near 60 levels which indicates positive momentum will like to continue ahead.
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Prices have shown a smart recovery from the lower levels and have formed a bullish engulfing candle stick pattern on the weekly time frame.
On the daily chart prices consolidated for the five consecutive days and finally given a breakout above its smaller degree downward sloping trend line on 25th March. The majority of the indicator and oscillator are in a bullish range shift zone which indicates a positive momentum ahead. The prices have also closed above its 21 & 50 DEMA and acting as a strong support for the counter.
The counter has given a V shape reversal rally on the daily chart and has also formed a basing formation near its support levels.
(Rohan Patil is a Technical Analyst at Bonanza Portfolio, Views expressed are the author’s own. Please consult your financial advisor before investing.)
