Back To Back Support Breakdown In Nifty/Banknifty

As we have seen in our last article, Nifty50 has created a bearish chart pattern on the weekly chart and the market has shown reaction for the same. There is not only one reason behind this big fall and the budget announcement has contributed to this fall. Overall market sentiments have turned to negative.

Weekly Chart: This week nifty has given a fall of 532 points and broken down back to back supports. Currently, nifty is closed near its weekly support i.e. around 11700. Now as per chart nifty will come down to complete its channel wave i.e. around 11000. If nifty breaks 11600 in the coming week then the next support is 11000 as per the weekly chart.

Daily chart: Last Thursday, nifty has given a breakdown to its trend line support and on the last trading day market has crashed by 3.11%. Currently nifty is trading near its 200 DMA and it is the important psychological support. After this big fall, we are expecting some short-covering and then fresh selling will come.

This market is looking like sell on rising i.e. near resistance and small support is looking around 11500.

In last to last week we have caught Head & Shoulder on the daily chart and it is worked well in the last two weeks. In this week bank nifty has traded in a range i.e. 31000 to 30500 and today bank nifty has broken down this range. Bank nifty is closed below its 200 DMA and this is the big negative sign. As per the chart, bank nifty is weaker than nifty.

The next small support is around 28900 and strong is around 27500. Currently, bank nifty is trading in a wide range of support-resistance i.e. 28900-30500. Sentiments are the same here as well i.e. sell on rising.

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Disclaimer: The contents produced here are purely for educational purposes. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on the above write-up.
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