Nifty Index Chart Analysis
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Now going forward, the index has support its placed around levels of 7680. If Nifty fails to hold this support zone, its likely to correct up to the levels of 7500-7550 levels. On the upside, the zone of 7770-7800 will act as a strong hurdle for the index. In case, if Nifty sustains above this resistance, it is likely to scale up to the levels of 7950-8000 level
Nifty remained under pressure during the most part of the first week of May and ended on a negative note at 7733 with a loss of 1.48 per cent. Apprehensions of slow-moving Chinese economy came back to haunt the markets during the time under consideration. With the PMI underneath the significant 50 level, signs of an economic contraction were evident in China. Frail development in China would again raise the ghost for weak commodity demand and Yuan devaluation like in 2015. On the domestic front, the big development came in as the Lower House of Parliament approved the most anticipated Bankruptcy Bill that sought to revamp old laws that regulate insolvency.
Technically, on the weekly time frame, Nifty has been trading in the falling channel. It made an attempt to breach the channel on the higher side, but occurrence of multiple Dojis at the higher end of the pattern indicated indecision amongst the traders at higher levels. Nifty faced resistance around the zone of 7990-8000, which also happens to be 50 per cent of the down-move from high of 9119.20 to low of 6825.80. Now going forward, the index has support its placed around levels of 7680. If Nifty fails to hold this support zone, its likely to correct up to the levels of 7500-7550 levels. On the upside, the zone of 7770-7800 will act as a strong hurdle for the index. In case, if Nifty sustains above this resistance, it is likely to scale up to the levels of 7950-8000 level. However, the level of 8000 will act as a major hurdle; any close above 8000 will result into an up-move up to levels of 8180-8240.
key levels to watch out for the medium term Here are
| Ideas | Nifty Levels | Action to be initiated | Probable Targets |
| Resistance for the medium term | 7770-7800 | Close above 7770-7800 on the weekly chart would give further momentum to the bulls. | 7950-8000 |
| Support for the medium term | 7680 | Close below 7680 on the weekly chart would trigger sell-off. | 7500-7550. |
Nifty Index Daily Chart Analysis
On the daily time frame, Nifty after registering high of 7792, witnessed a correction. At present, Nifty has formed a ‘Hammer’ pattern against previous day’s Doji candle indicates reversal in the market. Currently, the formation of reversal candle i.e. hammer is placed at 61.8 per cent retracement of previous rise from 7516 to 7992 levels. Nifty has filled the ‘Run Away Gap’ which was created on April 13, 2016. Now going forward, a move above 7780 i.e. Doji’s high would confirm the reversal pattern and fresh momentum is likely to pick up. In this case, the index is likely to touch the levels of 7930-8000. On the downside important support is placed around zone of 7650-7680. In case, if Nifty moves below this level it’s likely to touch levels of 7520. The daily momentum oscillator RSI is quoting around levels of 49 and as per the bullish range theory 40 is an important support.
Here are key levels to watch out for the short term
| Ideas | Nifty Levels | Action to be initiated | Probable Targets |
| Resistance for the short term | 7780 | Close above 7780 on the daily chart would give further momentum to the bulls. | 7930-8000 |
| Support for the short term | 7650-7680 | Close below 7650-7680 on the daily chart would trigger panic sell-off. | 7520 |
Conclusions (After Putting All Studies Together)
- The short term trend is currently in sideways trend, move above 7780 would confirm bullish trend.
- The intermediate trend is in the favour of the bulls and only a breach below 7650 would change the course of trend.
- The long term trend is in favour of bears as Nifty failed to cross resistance level of 8000.
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Buy Britannia Industries Ltd.
TGT 1 2900 TGT 2 2950 SL 2740
The stock is currently trading at Rs 2818. Its 52 week high/low stands at Rs 2195/Rs 3435 and were made on August 13, 2015 and May 08,2015. On the daily time frame, the stock witnessed a pullback after forming a double bottom around Rs 2510 level. At present, the stock is sustaining above its medium term and long term moving average i.e 100-day EMA of Rs 2802 and 200-day EMA level of Rs 2786. Going ahead, the stock has resistance around levels of Rs 2890-2920. If the stock breaches these hurdles along with volumes, its likely to enter into a range expansion mode and will accelerate on the higher side. The momentum oscillator RSI is quoting at crucial support levels which is at 40. Considering the pullback in the price from the vital supports around the lower level, the stock is likely to continue to move in the northward direction and traders can buy this stock for target price of Rs 2900-2950 with the stop loss of Rs 2740.
The stock is currently trading at Rs 75.60. Its 52 week high/low stands at Rs 17/Rs 95 quoted on January 28,2016 and May 08,2016. On the daily time frame, the stock after registering its 52 week high, entered into a corrective phase. However it took vital support on its important long term moving average i.e. 200-day EMA of Rs 56.50. At present, the stock has witnessed bullish breakout after form ‘Inverse Head and Shoulder Pattern’ around Rs 66. This indicates the long term trend is still in the favour of the bulls. The ‘RSI’ indicator is also indicating good strength ahead. Considering the bullish pattern and support from the lower levels, we recommend buying this stock for the price target of Rs 82-90 with the stop loss of Rs 64.