Hourly Chart

The Dramatic Week Ends With An Indecision

by Mitali Dutta on Market Analysis, Market Wrap

Nifty close 10805.45: This week the index started with 190 points (approx.) gap down and just after its next day it again drops 140 points (approx.) from the level of 10350 it took support and bounce back. At the end of the Friday’s trading session it stands at 10800 mark.

Resignation of RBI governor and States election were the major reason behind this roller coaster price movement. However, at the end of this week the index ends up with uncertainty by making Doji candle in the daily chart.

Let’s explore what could be the possible scenarios on different time frame.

Hourly Technical: As the chart suggest, price is flat in the hourly chart and the Bollinger Band has started squeezing. This is the level of 10800 marks and as we know this is a very important resistance level for the index and above this level 10900 mark is also going to work as a strong resistance zone. To continue its up move nifty must hold this level and trade above it and giving a close above this pre-mentioned level would be good sign of Bull run.

At this point MA lines are contracting as the price are being range bound but Longer and medium term MA lines are below the price so it is a good news for the Bulls. In other side as the Upper Bollinger line is coming to its mean, it will create resistance in case of any up move takes place.

Indicators in the hourly chart are flat due to less fluctuation of price. RSI is above 60, Stochastic is also above 60, ADX is at 24 (approx) and CCI is at 67 mark (approx.).

So as per the indicator position we can expect that if the market start trading higher indicators are going to support the trend but by seeing the chart and also by considering the price action, we are expecting it would not be so easy for the Bulls.

Hourly Chart

(Hourly Chart)

Daily Technical:  Daily chart has two consecutive Doji. Which suggest market is in indecision phase. But just like the hourly chart Most of the MA lines are below the price except the 100MA line. So there is presence of multiple support and there is presence of Resistance from various level.

At this moment 100MA and Upper Bollinger band going to act as a resistance but if the price slips below the 10800 mark this level will also work as a resistance.
As we mentioned earlier there are presence of multiple support so as per our expectation 10600 mark and 10350 are going to play as important support in case down fall takes place.

From the Indicator side, RSI is just above 55 mark, Stochastic is above 75, ADX is at 14 (approx.) and the CCI indicator is just below 60 mark. So because of the two consecutive Doji candle, Indicators are slightly flat but in case price start trading above the resistance level there will be support from the Indicators side.

Daily Chart

(Daily Chart)

Weekly Technical: The candle in the weekly chart suggest strength but when we look above the candle there are solid resistance level from 34 MA line (presently at 10874.66) and most importantly from mid Bollinger line (presently at approx. 10926.10). Previous week market tested this level and we can see the selloff (Red Candle)that happened.

Price is trading in between the MA lines in the weekly chart but important ones are below the price. So there would be support from these levels. Specially, 10500 and 10200 level.

Let’s discuss the indicators, RSI is at 50 (approx), Stochastic is just above the 50, ADX is at 17 level (approx) and the CCI is -40 (approx).

So there no such indication from the indicator side that price would trade higher but also there is no sign of extreme Bearishness. Once the price closes above 10950 we will be optimistic about the bull run. But if the price breaches the 10350 mark there will be retest of the low.

Weekly Chart

(Weekly Chart)

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Technical Chart

(Technical Chart)

 


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