Nifty Index Chart Analysis
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Nifty 8000-7970? No worries, it’s a significant support zone
Going forward, the zone of 8130-8150 is important support for Nifty and if this support is breached then it’s likely to test levels of 8030-7970 on the downside.
Nifty kicked off its movements during the second week of June on a cautious note ahead of the RBI policy review meet which took place on June 7. Most of the analysts and market experts were expecting a status quo and in line with the expectation, the RBI kept the rates and ration-repo and reverse repo rates, cash reserve ratio and statutory liquidity ratio unchanged. Raghuram Rajan took a pause this time.
Technically, Nifty formed a Small Bullish Candlestick pattern as on weekend June 3. At present, Nifty is hovering around levels of 8245-8265 zones, which is 61.8 per cent retracement of last major fall from 9119 to 6825.80 levels. However, Nifty did manage to trade above levels of 8265 post RBI policy announcement, but it witnessed profit taking at higher level and in the end, just managed to close above 8260 levels. Now going forward, Nifty will face resistance around levels of 8330-8350, which is previous major swing high witnessed on October 26, 2015. If Nifty manages to sustain above this zone of 8330-8350, it’s likely to scale up to levels of 8550-8630. On the downside, immediate support is placed around levels of 8130 and any close below this level will trigger fresh selling. In this case Nifty is likely to correct up to levels of 8000-7970. However, the zone of 8000-7970 is a significant support zone.
Here are key levels to watch out for the medium term
| Ideas | Nifty Levels | Action to be initiated | Probable Targets |
| Resistance for the medium term | 8330-8350 | Close above 8330-8350 on the weekly chart would give further momentum to the bulls. | 8550-8630 |
| Support for the medium term | 8130 | Close below 8130 on the weekly chart would trigger sell-off. | 8000-7970 |
Nifty Index Daily Chart Analysis
On the daily time frame, Nifty formed back to back two small rage negative candles ahead of the RBI meet and analysing three-day candlestick pattern we see a formation ‘Upside Gap 2 Crows’ Candle and this pattern is a bearish trend reversal pattern. However, Nifty closed above high of this candlestick pattern and hence, this bearish reversal pattern got negated. Now going forward, the zone of 8130-8150 is important support for Nifty. If any case, this support is breached then it’s likely to test levels of 8030-7970 on the downside. On the upside levels of 8300-8350, it will act as a stiff resistance level. If Nifty sustains above zone of 8300-8350, it’s likely to test 8550-8630 levels. The daily momentum oscillator RSI is quoting above 70, which is positive for Nifty.
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 | 8300-8350 | Close above 8350 on the daily chart would give further momentum to the bulls. | 8550 |
| Support for the short term | 8130-8150 | Close below 8150-8130 on the daily chart would trigger panic sell-off. | 8000-7970 |
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