Nifty closes above 5700 level - AXIS DIRECT

The benchmark indices opened the week marginally positive however huge selling pressure from initial session pulled index sharply lower to test 5671 level. Nifty closed at its three months low indicating weakening trend. With weekly close Nifty sustained above 5700 level with 2.23% loss at close of 5719.

Index extended its losses for the fifth consecutive week losing almost 440 points from the recent Top of 6111. Nifty on the weekly chart has formed a large bear candle coupled with high volumes. On the monthly chart index has also formed a sizable bear candle erasing almost past three months gains. With recent low of 5671 Nifty is hovering around 200 day EMA (5650) which remains an immediate crucial support zone in the near term. With Friday's close Nifty has formed a small 'Doji' candlestick formation and remained restricted within its previous session's high-low trading range. This suggests a short term pause in the current downtrend as well as indecisiveness amongst the participants. Currently index is sustaining below its short term down sloping (20, 50 day SMA) and long term (100 day SMA) which supports a bearish trend ahead. On the upside the crucial resistance zone is at around 5840-5850 which is 100 day SMA(5843) value as well as 38.2% Fibonacci retracement of the recent fall (6111 to 5671). For the week a short term as well as medium term trend bias remains to continue bearish as long as Nifty sustains below 5650. On the downside immediate support is at 200 day SMA level at 5550. During the week Nifty may trade within broad trading range of 5770-5550 levels with negative bias.

The daily and weekly strength indicator RSI is in bearish mode sustaining below its reference line indicating weakness. However the daily and weekly momentum indicator – Stochastic has placed flat in oversold zone which signals slowdown in the downward momentum.

The trend deciding level for the day is 5715, If NIFTY trades above this level then we may witness a further rally up to 5745-5770-5805 levels. However, if NIFTY trades below 5715 levels then we may see some profit booking initiating in the market, which may correct up to 5685-5655-5625 levels.

Stocks to focus for intraday Long: Bajaj Auto, Bpcl, Cipla, Dish Tv, Jindalsaw

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Source : Equity Bulls

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