Intraday Volatility Grips Nifty as it Recovers from Lows
The Nifty experienced a day of high volatility, with significant intraday swings in the market. Starting the day on a negative note, the index witnessed selling pressure. However, as the trading session progressed, it managed to recover from the lows and closed well off its intraday lows.
Crucial Support Level at 40-day Moving Average Holds for Nifty
One positive aspect for the Nifty is that it has closed above the crucial support level of the 40-day moving average, currently placed at 19,355 points. This indicates that the index is finding support at this level, and a decisive close below it would be required for a further decline. The 40-day moving average now becomes an important level to watch out for in the near term.
Nifty Faces Resistance at Crucial Hurdle of 19450 – 19500
On the upside, the Nifty is facing a significant hurdle in the zone of 19,450 – 19,500 points. This zone is marked by the key hourly moving averages, which are acting as resistance levels. The index will need to overcome this hurdle in order to make further gains. As long as the Nifty remains below this zone, the upside may be capped.
Divergent Signals from Momentum Indicators Point to Consolidation
The daily and hourly momentum indicators are currently providing divergent signals, indicating a potential period of consolidation for the Nifty. While the trend is still negative in the short term, the conflicting signals from the momentum indicators suggest that a period of consolidation is likely. This means that the index may trade within a range for a certain period before deciding on its next move.
Bank Nifty Forms Doji Pattern, Indicating Possible Consolidation
The Bank Nifty, after experiencing three consecutive weeks of decline, has formed a doji pattern on the daily charts. This pattern indicates a possible period of consolidation for the index. Furthermore, the Bank Nifty has reached its 20-week moving average, currently placed at 43,880 points, which could act as a support level and restrict further downside.
In conclusion, the Nifty witnessed a volatile day of trade but managed to recover from the intraday lows. The index closed above the crucial support level of the 40-day moving average, indicating a potential support zone. However, it faces resistance at the zone of 19,450 – 19,500 points. The conflicting signals from the momentum indicators suggest a period of consolidation for the Nifty. Similarly, the Bank Nifty has formed a doji pattern, indicating a possible consolidation phase. Overall, the short-term outlook remains negative for both indices, with downside targets of 19,100 for the Nifty and 43,500 for the Bank Nifty. Traders and investors should closely watch these key levels and trends to make informed decisions in the current market environment.
Analyst comment
Positive: The Nifty recovered from intraday lows and closed above the crucial support level of the 40-day moving average.
Neutral: The Nifty is facing resistance at the zone of 19,450 – 19,500 points and there are conflicting signals from momentum indicators.
Neutral: The Bank Nifty has formed a doji pattern, indicating a possible period of consolidation.
As an analyst, it is expected that the Nifty will continue to face resistance and may consolidate in the near term. The short-term outlook remains negative for both indices, with downside targets of 19,100 for the Nifty and 43,500 for the Bank Nifty.
