Nifty To Consolidate In Narrow Range

Chirag Gothi / 22 Oct 2015

Nifty Technical View:

In this week we have seen that weak cues from the Asian market has been primary cause for the pause in the Nifty upside rally, and Nifty has consolidate in a narrow range, where the upper level range is around 8294 levels and lower levels of the range is around 8217 levels. 
 
On the Daily time frame chart we have seen that the Nifty index is trading above 8200 levels these levels are very crucial for the Nifty; because it is a 61.8 per cent retracement level of the previous down move. At this levels there are two possibility first one is that the Nifty index may slip below 8200 levels, if this happens then the next strong support for the index would be 8065 levels and the second possibility could be Nifty may consolidate in the range of 8200-8300 levels and after strong consolidation will breach its resistance point of 8300 and re-test levels of 8388 which is also its 78.6 per cent retracement levels of previous down move. 
 
On the Daily time frame chart we have observed that there was a positive crossover given by 20 EMA, which means the short-term trend is on the positive side as long as the index stays above this important short term moving average.
 

Momentum indicator RSI has managed to sustain above 70 levels, this level is specially known as overbought levels so that we may see some profit booking at these levels.
 
Conclusion: On the basis of 61.8% Fibonacci retracement levels, 20 EMA crossover and RSI indicator we expect that in the forthcoming week Nifty would trade in narrow range and only if the index manages to sustain above the levels of 8300 we could see a momentum on the upside. On the lower end level of 8200 is a crucial support level and next major support at 8065. 

Disclaimer : This is not a recommendation to buy or sell, it is just an index view which will help you in near term.

 

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