Technical View: After the sharp correction seen in the last few sessions, Nifty 50 saw gains on January 7. This was mainly seen due to short-covering. The index closed above the 200-day EMA (exponential moving average) of 23,700. But stability of this level is important for further movement towards zone 23,900-24,000. Experts said a decisive fall below this could pull the index back to its January 7 low (23,550). Nifty opened at 23,680 and remained in the positive zone throughout the session and reached near 23,800. The index closed 92 points higher at 23,708. The index formed a small bullish candlestick pattern with a long upper shadow on the daily chart. This pattern looks like an inside bar pattern.
Technically, this market action is indicating an attempted upward bounce after a sharp weakness.
How can Nifty move tomorrow on January 8?
Nagaraj Shetty of HDFC Securities Said that the short term trend for Nifty remains weak. Its momentum indicators RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) are still in the negative zone.
However, “An upside bounce on Tuesday could be a slight positive factor for the bulls to come back. It has immediate resistance at 23,800. An upside breakout on this resistance can take it further higher in the short term. It has immediate resistance at 23,460. It is visible.”
The above derivatives data indicates that Nifty is taking support at 23,500. With this, the index may face resistance at the level of 23,800-24,000.
How can Bank Nifty move tomorrow on January 8?
Bank Nifty also recovered some of its previous day’s losses. Today it increased by 280 points to reach 50,202. On the daily timeframe it formed an inside bar like pattern. This pattern was somewhat like the Bullish Harami pattern. The trend may remain in favor of the bears as long as the index remains below the 200-day EMA (50,500) and 200-day SMA (50,700).
Hrishikesh Yedve, AVP, Asit C Mehta Investment Intermediates “While a short-term pullback can be expected if the index sustains above 49,750, it needs a decisive break above 50,700 to trigger a strong rally,” it said.
Meanwhile, India VIX, the volatility index, fell more than 6% to 14.66. But still remains above 14 mark. This mark is an uncomfortable zone for bulls.
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