Daily Nifty And Bank Nifty Trading Tips 07 March

Sensex (21514) / Nifty (6401)

Yesterday, once again our market opened slightly higher as indicated by the SGX Nifty. During the initial hour, Nifty corrected marginally but immediately recovered from the lows and managed to keep the momentum intact till the closing point of the day. On the sectoral front, excluding Healthcare, all the sectors closed in the positive territory. The Realty, Power, and Oil & Gas counters were the major gainers in yesterdays up move. The advance to decline ratio was strongly in favor of advancing counters.

Formation

·         The ’89-day EMA’ and the ’89-week EMA’ are placed at 20660 / 6142 and 19547 / 5854 levels, respectively.
·         The ’20-day EMA’ and the ‘20-week EMA’ are placed at 20881 / 6205 and 20698 / 6155 levels, respectively.
·         The 78.6% Fibonacci retracement level of the fall from 6355.60 (high on January 23, 2014) to 5933.30 (low on February 04, 2014) is placed at 6265.

Nifty Daily Chart

Trading strategy:

The bulls were unstoppable as they continued marching higher for the third consecutive session. In the process, our benchmark index surpassed swing high of 6356 and posted a highest ever closing at the 6400 mark. A move above 6300 was quite unexpected for us; but eventually, we had to succumb to the momentum and change our stance once the index moved beyond 6356 level. The daily chart now exhibits a breakout from the 'Horizontal Line' resistance. Considering the momentum, the Nifty may even cross it’s all time high of 6415 and may move towards 6450 – 6470 levels, which coincides with the 127% retracement of fall from 6356 to 5933. On the flipside, 6356 now remains to be an important support level for the index.

Support Levels 6356 – 6287

Resistance Levels 6450 – 6470

Bank Nifty Outlook - (11278)

Yesterday, the Bank Nifty too opened slightly higher in line with the benchmark index. It was the banking index who contributed heavily in the strong up trend. The heavyweight constituents like, ICICI Bank and Axis bank continued their massive run, which reflected in the Bank Nifty as it managed to break the strong resistance level of 11248. Looking at the momentum, the index may extend the rally towards 11350 – 11400 levels. On the other hand, 11150 – 11100 levels would act as a key support for the index in coming trading sessions.

Bank Nifty Daily Chart

Actionable points:

View Neutral

Support Levels 11150 – 11100

Resistance levels 11350 – 11400