In an earlier write up we have said that the market trend was sell on the rise and the market reacted the same. Nifty 50 touched the levels of 15750 and was given a sharp bounce back on 17th May. However, that bounce back was not a fresh rally that was only short covering. Everyone was happy by seeing the huge rally and Morning Star on a daily chart of Nifty. But the market has given a surprise on weekly expiry by opening gap down with more than 300 points and on next day opened gap up by 250 points. Many trader's stop-losses are triggered in this trap of bull & bear. We faced this roller coaster ride of the market and we can say this ride has been done. Now the market is ready to move towards 16600/17000 til the monthly expiry.
Nifty 50: The index has a complete Double Bottom on the daily chart and has confirmed bottom out. Right now it has closed near resistance 16300, need breakout to this supply zone for trend change confirmation. We are bullish on the Nifty 50 from current levels and our view is to buy in dips. The strong support levels are 16000/15800 and resistances are 16500/16700.
Banknifty: Bank index is also reacting the same as the Nifty, bank leaders recovered from the bottom. The index has completed Cup & Handle and shown a green flag to bulls. Banknifty is ready for up moves but closed near resistance, still we are bullish here also. The strong support levels are 34000/33500 and resistance levels are 34600/35000.
If we look at the RSI indicator on a daily time frame then it has shown divergence on both indexes. However, American indexes are in a downtrend so we have to trade cautiously or stick to intraday. Our opinion is to prefer large-cap stocks for some days to avoid big losses.
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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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