Trend deciding level for the day is 5555 in Nifty - AXIS Direct

The benchmark index opened the previous week on a flat mote and continued pullback rally in initial half making a weekly high at 5754 level, however selling pressure at higher levels drift index lower below 5600 levels. On weekly basis index closed at 5553 down by 2.28%.

On the daily chart Nifty has observed selling pressure around 38.2% Fibonacci retracement resistance at 5745 levels and fallen sharply losing almost 220 points from the recent swing high(5754). For the fourth consecutive week Nifty has continued its downtrend, ending below its earlier multiple support zone around 5570 levels. On the daily as well as on weekly chart, Nifty is trending down with lower Top and Bottom formation indicating weakening trend. At current close Nifty is hovering around the bullish gap area (5526-5447) formed on 14th Sept. which remains an immediate crucial support. Any decisive close below 5525 levels would lead index further downside in the range of 5430-5400 levels. On the daily chart Nifty has formed a small Doji candlestick pattern carrying a lower shadow which indicates a short term pause as well as indecisiveness. If Nifty trades above Doji's high of 5577 then a short term pullback rally in the range of 5610- 5640 cannot be ruled out. Nifty is sustaining below its crucial long term 200 day EMA(5670) as well 200 day SMA (5640) averages which signals bearish sentiments. The short term moving averages are sloping downward which supports bearish trend. For the week we expect index to trade with mixed bias within 5650-5400 levels. The short term traders are advised to adopt sell on rally strategy.

The daily and weekly strength indicator RSI is in bearish mode indicating bears are gaining strength. The momentum oscillator - Stochastic has also accelerating downward which suggests downward momentum to continue.

The trend deciding level for the day is 5555, If NIFTY trades above this level then we may witness a further rally up to 5575-5595-5620 levels. However, if NIFTY trades below 5555 levels then we may see some profit booking initiating in the market, which may correct up to 5530-5510-5490 levels.

Stocks to focus for intraday Long: Adani Port, Apollo Tyre, CESC, Coalpal, Dabur, GSPL, Heromotoco, HIndalco, Ongc

Stocks to focus for intraday Short: DLF, Exide Ind., HDFC, INFY, L&T, Lupin, Mcdowell, Yes Bk, ZEEL

Source : Equity Bulls

Keywords