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THE NIFTY STARTED THE TRUNCATED WEEK ON A NEGATIVE NOTE. HOWEVER, SUPPORTIVE EFFORTS FROM 200 DAYS

The Nifty started the truncated week on a negative note. However, supportive efforts from 200 days EMA helped index to recoup intra-week losses entirely and settle the week above 17300 mark. The weekly price action formed a bull candle carrying higher high-low, indicating follow through strength to last week’s bullish hammer candle. 

Going ahead, we expect index to consolidate in the broader range of 17500-16700 amid stock specific action. The Nifty has rallied 680 points over past five sessions that hauled short term oscillator in overbought territory, indicating couple of days breather ahead of US inflation data cannot be ruled out. However, such a breather should not be construed as negative instead any dip from hereon should be used as buying opportunity amid onset of earning season, to ride next leg of up move towards 17500. Sustainability above 17500 would lead to further acceleration of upward momentum. Our positive view is further validated by following observations

Nifty Bank: 39178

The index started the week with a gap down action, only to recover the entire losses towards the end and settled above 39000 mark . In the process, price action formed a Bull candle with its body engulfing last week’s Bullish Hammers small real body with higher high -low signifying follow through strength and presence of elevated buying demand 

Going forward, we expect Bank Nifty to consolidate in 37500 - 39500 range in coming few sessions as after 2000 points rally in just four sessions prices have reached overbought range and few days consolidation cannot be ruled out . However, dips should not be construed structurally negative rather a buying opportunity ahead of onset of earnings season

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