Nifty loses 4% on weekly basis - AXIS DIRECT

The benchmark index commenced the previous week with a down gap and remained under pressure throughout the week. On weekly basis Nifty lost almost 4% at close of 5651.

Nifty on the weekly chart has formed a sizable bear candle with lower High-Low formation ending below previous week's low. Nifty on the daily chart as well as on weekly chart has confirmed bearish trend as it has formed lower Top and lower Bottom formation. After 5-6 trading sessions consecutive down fall Nifty on the daily chart has formed a small bear candle with either side shadows indicating reduced downside momentum as well as indecisiveness at lower levels. At current levels Nifty is placed below its 200 day EMA at 5672 which remains a bearish sign. However with Friday's low Nifty is approaching towards 200 day SMA of 5618 level which remains an immediate support. A decisive close below 5618 level would accelerate further selling in the range of 5550-5530 levels. On the upside immediate resistance is placed at 5690-5710 levels and any close above these would lead a short term pullback rally in the range of 5750-5788 levels.

On the daily chart the short term 20 and 50 day SMA are sloping downward which supports bearish trend. As the truncated week ahead along with F&O series expiry we expect index to trade with volatility on either side swings in the broad range of 5750-5610 levels.

The daily and weekly strength indicator RSI is in bearish mode indicating weakness ahead. However the momentum oscillator - Stochastic has placed in oversold territory which may cause for a possible pullback rally in the near term.

The trend deciding level for the day is 5650, If NIFTY trades above this level then we may witness a further rally up to 5685-5715-5745 levels. However, if NIFTY trades below 5650 levels then we may see some profit booking initiating in the market, which may correct up to 5625-5600-5565 levels.

Stocks to focus for intraday Long: IDFC, Punjlloyd, Albk, Bajaj Auto, JindalStel, TataChem, Federal Bk, IGL

Stocks to focus for intraday Short: SBIN,Indusind Bk, M&M, TCS, Sunpharma, TechM, CESC, Tata Steel

Source : Equity Bulls

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