Nifty respects the much anticipated support level of 7350
In yesterday’s market wrap, we saw Nifty achieve our previously stated support level of 7350, which was essentially the level of the support trendline of the channel visible on the chart. Today, Nifty gave a positive closing after two days of fright, closing 84 points up.
The RSI (momentum indicator) has again bounced upwards but only after breaching the level of 30, which is a sign of warning. Though, given the appreciation shown to the 7350 level, we expect Nifty to head higher , the underlying trend still remains bearish. In order to understand this better, lets look at the intraday chart.
Here we have the 15 mins charts of Nifty. We can observe the movement of Nifty more closely here. On the chart it seems like Nifty is definitely headed higher for the resistance trendline near the level of 7580, do note that this is a very short term analysis.
On the daily chart of Nifty, we can still see there is much downside left for the index.
The international markets were also steady today , Shanghai index closed 3% higher, thus calming the nerves of traders everywhere, enabling a sigh of relief.
Chart of the Day!
On the chart of Yesbank, we will look at a new Japanese candlestick pattern emerged on the charts today called ‘The Morning Star’. It is the second best bullish pattern after the ‘Hammer‘ we spoke about in one of the previous Market Wraps.
This pattern is a complex pattern which comprises of:
- Three period candles
- It occurs after a downtrend
- Is a significant bullish reversal pattern
- Its counter part is called the Evening Star and occurs after a rally, at the top.
We just discussed that Nifty has also given short term bullish signals, similarly, Yesbank also has a resistance at 713-715. The volumes were also high today supporting the ‘Morning Star’ pattern. On the indicator front, RSI has just turned up from the oversold borderline level of 30 , and this upturn indicates that better days are ahead for Yesbank.