The Nifty remained volatile throughout the session and closed in the red, extending the downtrend to the second day on February 4, as banking and auto stocks came under selling pressure.
The index formed a bearish candle on the daily charts, as the closing was lower than opening levels amid elevated oil prices and mixed global cues.
On the weekly basis, Technically the Nifty traded above the 50-day simple moving average (SMA) but witnessed profit booking near the 20-day SMA or 17,800. The Nifty holding to the 50-day SMA is largely positive. The index gained 2.4 percent and formed a bullish candle that resembled a Shooting Star pattern.
The Nifty50 registered a Shooting Star kind of formation on weekly charts with a long upper shadow hinting that pull-back attempt from the lows of 16,836 to a recent high of 17,794 levels is weakening. Moreover, despite the recent upsurge, most of the momentum indicators remained in the sell mode.
The options data indicates that the Nifty could remain in a broader range of 17,200-18,000 in the coming days.
The broader markets also extended selling pressure. The Nifty midcap 100 and smallcap 100 corrected 0.76 percent and 0.92 percent, respectively.
Weekly chart of nifty which formed shooting star pattern, yet we need confirmation on Monday.
The Bank Nifty opened positive at 39,128 and climbed to 39,278.60 in the morning but squandered the gains following a selloff in banking names.
The index finally closed at 38,789.30, down 220.70 points, and formed a bearish candle on the daily scale.
However, there was a bullish candle formation on the weekly frame, as it gained 2.9 percent during the “Now if it sustains below 38,850, weakness could be seen towards 38,500 and 38,250, whereas, hurdles exist at 39,250 and 39,500 levels.
Weakness was seen in M&M Financial, Aditya Birla Fashion & Retail, Lupin, Zee Entertainment, MCX, Indiabulls Housing Finance, Max Financial Services, Bata India, RBL Bank, Shriram Transport, M&M, L&T Finance Holdings and Bharat Forge.
For traders, 17,400-17,350 would be the sacrosanct support level, above which the index can continue the up move to 17,700-17,850. On the flip side, below 17,350, the uptrend would be vulnerable and could trigger a short-term weakness to 17,200-17,150.
1. Technically on weekly chart stock has give a break out and was formed bullish candle above its trend line
2. weekly chart suggest that stock is well place above 20 DMA.
3. Momentum indicator RSI is showing positive cross over indicates strength.
4. On weekly chart the price has given a breakout from its trend line formed as shown in the chart image; which suggest a possible up-move of 26 points (previous high) in coming weeks.
The majority of the indices saw a positive week. The IT and FMCG as well as banking sector were the most positive throughout the week. While INDIA VIX had impact of budget also the NIFTY OIL and GAS was the top looser as far as indices are concerned.
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