25 December 2017
Last week was very volatile for Indian stock market when Gujarat assembly election results had thrown markets in s talespin. Last Monday, major indexes had seen huge intraday up and down trend within a few hours. But, by the closing session of the week on Friday, Nifty had settled in a small range near its range high and major resistance of 10,500.
Looking at technical chart of Nifty, it becomes clear that this index is range bound and next week’s trading can bring either a positive breakout from current levels, or force Nifty in a trend reversal where the index will trade within the same higher and lower levels as it traded in last three or four sessions.
It will be interesting to see if Nifty will trade positive next week, or whether bears will be able to force it down back to its support level. Nifty is currently range bound within a narrow range of 100 points, between 10,500 (resistance) and 10,400 (support) levels.
If Nifty starts the new week with gains and trades above the level of 10,500, then it may find buyer support. If the index succeeds in trading above 10,500, then one can assume a positive breakout will take place and bulls will be in charge of Nifty.
However, if the index fails to breach this major resistance, then day traders can expect a sideways trend where the index will be restricted within its immediate support and resistance levels as explained above. In such conditions, day trading is best done with the help of pivot levels.
Comparatively, Bank Nifty has been showing a weaker trend, as we had been writing previously, and has more chances of remaining range bound than rallying above its current range top / resistance of 26,000.
Well be back with more information once stock markets open on Tuesday.
Till then, good luck and enjoy the holiday!