Nifty Index Chart Analysis

Sanket Dewarkar / 09 Jun 2016

Going forward, the zone of 8130-8150 is important support for Nifty and if this support is breached then it’s likely to test levels of 8030-7970 on the downside

Nifty 8000-7970? No worries, it’s a significant support zone

Going forward, the zone of 8130-8150 is important support for Nifty and if this support is breached then it’s likely to test levels of 8030-7970 on the downside.

Nifty kicked off its movements during the second week of June on a cautious note ahead of the RBI policy review meet which took place on June 7. Most of the analysts and market experts were expecting a status quo and in line with the expectation, the RBI kept the rates and ration-repo and reverse repo rates, cash reserve ratio and statutory liquidity ratio unchanged. Raghuram Rajan took a pause this time.   

Technically, Nifty formed a Small Bullish Candlestick pattern as on weekend June 3. At present, Nifty is hovering around levels of 8245-8265 zones, which is 61.8 per cent retracement of last major fall from 9119 to 6825.80 levels. However, Nifty did manage to trade above levels of 8265 post RBI policy announcement, but it witnessed profit taking at higher level and in the end, just managed to close above 8260 levels. Now going forward, Nifty will face resistance around levels of 8330-8350, which is previous major swing high witnessed on October 26, 2015. If Nifty manages to sustain above this zone of 8330-8350, it’s likely to scale up to levels of 8550-8630. On the downside, immediate support is placed around levels of 8130 and any close below this level will trigger fresh selling. In this case Nifty is likely to correct up to levels of 8000-7970. However, the zone of 8000-7970 is a significant support zone.

Here are key levels to watch out for the medium term 

Ideas

Nifty Levels

Action to be initiated

Probable Targets

Resistance for the medium term

8330-8350

Close above 8330-8350 on the weekly chart would give further momentum to the bulls.

8550-8630

Support for the medium term

8130

Close below 8130 on the weekly chart would trigger sell-off.

8000-7970

 

Nifty Index Daily Chart Analysis

On the daily time frame, Nifty formed back to back two small rage negative candles ahead of the RBI meet and analysing three-day candlestick pattern we see a formation ‘Upside Gap 2 Crows’ Candle and this pattern is a bearish trend reversal pattern. However, Nifty closed above high of this candlestick pattern and hence, this bearish reversal pattern got negated. Now going forward, the zone of 8130-8150 is important support for Nifty. If any case, this support is breached then it’s likely to test levels of 8030-7970 on the downside. On the upside levels of 8300-8350, it will act as a stiff resistance level.  If Nifty sustains above zone of 8300-8350, it’s likely to test 8550-8630 levels. The daily momentum oscillator RSI is quoting above 70, which is positive for Nifty.

Here are key levels to watch out for the short term 

Ideas

Nifty Levels

Action to be initiated

Probable Targets

Resistance for the short term

8300-8350

Close above 8350 on the daily chart would give further momentum to the bulls.

8550

Support for the short term

8130-8150

Close below 8150-8130 on the daily chart would trigger panic sell-off.

8000-7970

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DCB ……Buy ……. CMP @ Rs 96
BSE CODE: 532772    TGT1 Rs 102 TGT2 Rs 107 SL Rs  88 (CLS)

The stock is currently trading at Rs 96 (as of June 7). Its 52 week high/low stands at Rs 150/ Rs 68.50 and was made on July 14, 2015 and February 21, 2016. On the daily time frame after registering high of Rs 101, the stock entered into a corrective phase. The stock has formed multiple supports in the range of Rs 87-Rs 90. At present, the stock has managed to sustain above level of Rs 93, which is its long term moving average of 200-day EMA level. The stock has also managed to breached its trend line resistance which was placed around levels of Rs 93 with decent volumes. The daily 14 period RSI is trading above 60 levels which is positive for the stock. Considering the above factors, it’s likely that the stock will touch levels of Rs 102-Rs 107 in the medium term. Hence, we recommended buying this stock with the stop loss of Rs 88 for possible targets of Rs 102-107          

MCX INDIA LTD ……..Buy…….CMP @ Rs 982
BSE CODE : 534091    TGT1 Rs 1045  TGT2 1080   SL Rs 939

The stock is currently trading at Rs 982. Its 52-week high/low stands at Rs 1188/ Rs 726 made on July 23, 2015 and February 12, 2016. On the daily time frame, the stock has formed sequence of higher top higher bottom after registering low of Rs 725-726. At present, the stock is trading above its important long term moving average i.e. 200-day EMA . The stock has retraced after registering high of Rs 1013, Since the fall has come in with low volume we consider this as a buying opportunity.once the stock manages to trade above Rs 1000 when its likely to gather momentum on the upside.The momentum oscillator RSI is quoting above 60, which is positive for the stock. By taking into consideration all the parameters, we are suggesting buying in this stock with the stop loss of 939 for the targets of Rs 1045-1080.

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