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Technical analysis of Nifty and Banknifty
Daily chart of NIFTY50
Strong Bearish trend at the moment. If you look at the daily chart of Nifty50. On the first day of the week we saw a bug fall in the market . The economy is not great that it would break lifetime high which was made before corona. So it’s expected the Nifty to slide. The candle made by Nifty50 is a long-legged Doji candle. Now the interesting thing is the long-legged Doji candle. It suggests a trend reversal, but that will happen next day or next week , Let’s see.
RSI is still bearish, and it will be more bearish if it slides below 40.
Weekly chart of Nifty50
Bearish Engulfing pattern formed in NiFTy50 in weekly chart , which suggest more downside here. Though , its on Support of weekly 5 point EMA but if sellers are strong it will be broken as well.
Good thing about Nifty bank is it closed above 23000 support, but overall structure is still bearish with closing on Friday candle is comfortably below Thursdays candle. But again Long legged Doji candle so one bounce is possible here. Short or big depends on where it sustain / close .
PIVOT POINT ( SUPPORT and RESISTANCE)
All the crucial support levels has been broken By Nifty50 especially 11350 which was very tough Resistance earlier. For Upside Nifty had to cross 11350 first and then 11500 for upside. If Nifty50 continously close below 11350 then we are heading for 11100 and 10900 soon.
For Nifty bank
On the downside 23000 is near today’s low which is immediate support and if broken then 22500 will be next level to watch out and strongest support on downside is 210000 level.
On the upside immediate resistance is 23400-500 zone , 24000 and if broken then Mondays high will next strong resistance will be Mondays high which is currently almost impossible to break.
Moving average -:
10900 is 200 day EMA and it’s a crucial Support and as long it’s safe market won’t crash big like Mondays fall. 20 day EMA is already broken and now next support on the line is 50 day EMA near 11050 and then 10900 as said.
25000 was very strong resistance as it was 200 day EMA but it won’t be broken so easily and now Nifty bank has immediate support near 22350-22450 zone as per moving average as 50, 100 day moving average are in that zone.
PCR ratio -:
Below 0.7 = Over sold
Near 1 = Neutral
Above 1.5 = Over baught
Put call ratio for
And in Nifty bank = 0.6895
So, as per PCR ratio, Nifty and Nifty bank both are entering in Oversold zone zone , So we expect some bounce from here either now or when PCR ratio is near 0.3 to 0.5 but strong or dead bounce we don’t know. It depends on if it sustain or not
Heikin Ashi -:
Hekin Ashi shows an accurate trend, but it’s lagging in the Indicator as it follows previous candle prices.
Both for Nifty and Nifty50 Hekin ashi is suggesting a Strong Bearish trend at the moment in daily chart.
My view on Nifty and Nifty bank -:
For Nifty50 and Nifty bank
Nifty and Banknifty both are bearish at the moment. But I have three scenerio at the moment.
- Nifty50 break 11100 and then 10900 comfortably which is 200 day EMA then 9700-9800 zone will be very very crucial because if that zone broken then you have to either exit previous portfolio or start fresh Investment for long term at best price ..whatever suits you. That will bring bloodbath in market like March.
- In this case Market bounce from here from tomorrow without touching 11100 or 10900 zone. Believe me if this bounce come then it will be dead bounce.
- If market touch 11100 or 10900 and then bounce back strongly, this bounce will be stronger and will make Nifty50 strong enough to make one more attempt to break 11800.
Personally I can only predict about next week , where I feel some bounce is possible here in NiFTy50 and Nifty bank because of last closing came on Friday and as it’s holding up in support as well, but next trend will be dependent on 3 scenarios I explained.
Stocks of the week
- HINDUSTAN UNILEVER
One sector which I trust for long term investment is FMCG when the Market is falling because that sector gets a little carried away with the Nifty50 movement and give slow but steady movement for the long term and when it comes to this sector then we have a leader in that sector which is HUL. For fundamental of this stock let’s read the post by clicking on the below link which I posted on 11th July 2020..why it’s recession-free and it’s all details 👇👇👇👇🤙
Now , let’s see daily chart 👇👇👇
After a big fall, HUL took support near 200 days EMA on Friday and bounced back also formed Inverted Hammer candle. PCR ratio is 0.51475 which suggests the stock is in the oversold zone. You can add at the Current market price but even if it falls from here then where to add ?? See the below chart
First buy is now , second buy is near 2000-2050 …In March we had lifetime opportunity to buy this at 1750-1800 zone that’s the dream buy for this stock.
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