The week has ended in red both on Nifty and Banknifty with almost reaching its previous averages.
The Nifty Weekly has a bottom in place if we look into the series of corrections in the past. The Index fell to its 20- week average and marginally closed below 17645. There is no such confirmation on the further downside, but we need a close above 20DMA of 17650 and then 18000 for confirmation on further upside.
The weekly chart confirms that there is volatility in place in the range of 17400 to 18400 with the Budget is in place after this week.
The daily nifty displays a clear Doji formation on the last trading day which is closer to the trend line support and marginally with 20DMA. The fall may get arrested if there is a gap down and the close is above 17800. All that we need is a positive close after the knee jerk below 20DMA and 38% of retracement at 17608. For now, 17380 is a final bottom that can occur, and thereby if the dip gets bought into, the rally could take the Index to a new lifetime high.
The Banknifty is standing strong compared to that of Nifty in terms of correction/ retracement. The weekly close was negative, but it didn’t go beyond 38% retracement as well above 20DMA of 37568. On the other hand, 37000 is a possibility if the structure gets broken, and thereby the index will be positioned to move higher above 37568.
On daily charts, 20 DMA is placed at 37213 and the close was positive with the lower shadow of the candle confirming the buy on dips. The trend is positive but all that we need is a close above 38030 which is 50% of the fall from 38800.
View: We look for buy-on-dips opportunities as long as the trend remains positive. We take action only of the close below the averages and then with negative divergences. Until then we are not bearish in terms of trend, on markets.
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