Decline in Markets Bring Nifty Near its Support Level
MARKET OUTLOOK – 03 Mar, 2017
Decline In Markets Bring Nifty Near Its Support Level; Trend Continues To Be Sideways And Choppy; Traders Who Have Long Positions In Nifty Should Protect With Discipline; Bank Nifty Remains An Avoid Till Breakout.
NIFTY: Nifty had a down day today; prices opened with a gap up of 40 points near its resistance at 8982 but then traded downwards throughout the day. Eventually, index closed with a loss of 48 points at 8894, near the lows, which is further a sign of weakness.
With a continuous fall after lunch and close below 8900, Nifty has closed near its support zone. The fact that it could not hold resistance makes the trading range of 8860‐8980 more interesting.
Big trade will only come beyond this range and until and unless we see a ‘decisive’ breakout traders should stay out. This is due to the fact that all the action which is going on from last seven days happened inside the range only. Prices are moving in zig‐zag pattern but trading range still persists.
After a period of expansion, markets tend to consolidate. This seems to be happening in the Bank Nifty also. We will see a breakout from this contraction soon but till then wait…
Bank Nifty had a down day in the business; prices started with a gap up of 100 points at 20885 and made a high just above 20900. However, prices started to fall in staircase pattern and eventually closed near the lows just below 20550 with a decline of 240 points.
Yesterday was a narrow range day and we had anticipated a big move that came on the downside which took prices near its support area. On the daily charts, Bank Nifty had a strong support zone inside 20300‐20450. A close below this range would be a signal of deeper correction in the index.
The index is in a trading range 20450‐21050; prices were at the verge of a breakout but came down from its resistance. Yesterday, we gave a trade in the direction of a breakout i.e.
Buy if Bank Nifty breaks above 21100; OR; Sell if a price breaks below 20400. The index failed to cross above two levels; so neither of the trade got executed but the trade is still valid for tomorrow. Take one trade only whichever executes first and stops in either case would come at 20750.
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