Technical View: Nifty 50 appeared to be trading in a consolidated phase, giving up its gains of the last three days. Bears maintained strong control over Dalal Street on Friday. The index was seen trading well below all major moving averages with a negative trend in momentum indicators. Heavy selling pressure was seen in banking and financial services and technology stocks. Due to this, the index closed half percent down on January 17. Negativity in the market further increased as the short-term moving averages fell below the long-term moving averages.
Experts say unless the index gives a decisive closing above 23,350 and sustains above it, consolidation may continue in the upcoming sessions, with immediate support at 23,100. According to experts, above 23,350, initial resistance is expected at 23,450 (50-week EMA). After this, resistance will be at 23,600 (20-day EMA).
On Friday, Nifty 50 opened with a fall at 23,277 and remained under pressure throughout the session. At the end of the market, it fell 109 points to 23,203. The index formed a bearish candlestick pattern with lower shadow on the daily chart. This pattern is indicating a lack of strength in the recent uptrend along with buying interest at lower levels.
The previous opening downside gap seen on January 13 has acted as a strong resistance for now. This index fell down almost 1 percent. It formed a doji candlestick pattern on the weekly timeframe. This is indicating uncertainty between bulls and bears.
How could Nifty move on Monday 20th January?
Nagaraj Shetty of HDFC Securities According to, the short term trend of Nifty remains weak amid range movement.
He said, “Only a decisive rise in Nifty above 23,400 can generate fresh buying enthusiasm in the market. Immediate support is seen at 23,100.”
These 5 stocks will create a stir in the market next week, after the market opens there can be strong earnings in the shares.
Weekly options data is indicating that the level of 23,500 is expected to act as immediate resistance for Nifty 50. Immediate support is visible at 23,200.
How can Bank Nifty move on Monday 20th January?
Bank Nifty has decisively rejected the higher high-higher low formation along with the upside rally of the last three consecutive sessions. The index fell 738 points (1.5 percent) to 48,541. The index formed a bearish candlestick pattern on the daily chart. It remains well below all major moving averages, which is a sign of weakness.
On the weekly timeframe, the banking index was down 0.4 per cent. The index formed a small bullish candle with a long upper shadow and small lower shadow. This pattern is indicating high level of volatility.
Anshul Jain of Lakshmishree Investments “Bank Nifty rejected the 8-day moving averages but remained stable above the key support level of 48,500. A break below this level in the index could take it to lows of 47,900,” it said.
He further said that due to the resilience seen at the current level, there is a possibility of the index rising to 49,600 before any new weakness.
Meanwhile, India VIX, the volatility index, remained in the higher zone. This made the bulls uncomfortable. On Friday, the VIX rose 1.83 percent to 15.75. Whereas during this week it remained up by 5.58 percent.
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