PRE- MARKET COMENTRY: NIFTY to extend decline towards the 23,300-23,200 levels

MUMBAI, 10 SEPTEMBER: NIFTY on the daily chart formed a third consecutive sizable bearish candle with a lower high and a lower low and a bearish gap above its head (23,635-23,571) signalling continuation of the corrective decline with the Nifty closing below the July low of 23,606.

Immediate bias in the index continues to remain down and only a formation of higher high and higher low on a sustained basis in the daily chart will signal a pause in the current down trend.

Index to extend the last 1-month decline towards the 23,300-23,200 levels in the coming sessions being the 80% retracement of the entire previous up move 23,070-24,774.

Pullback attempt from the current oversold territory will face immediate resistance at Wednesday’s gap area of 23,650. While stiff resistance is placed around 23,800-24,000 levels being the recent breakdown area and 20 days EMA. Previous support area is likely to reverse its role and act as resistance in short term.

BANK NIFTY: A weakness below 56,000 levels will signal extension of the corrective decline towards 55,300 and 54,800

Bank Nifty on the daily chart formed a third consecutive sizable bearish candle with a lower high and a lower low signaling continuation of the corrective decline with the Bank Nifty closing below the 56,500 levels.

Index is currently placed at the lower band of the last 10-week range 56,000-58,700. A weakness below 56,000 levels will signal extension of the corrective decline towards 55,300 and 54,800 levels in the coming weeks.

Immediate bias in the index continues to remain down and only a formation of higher high and higher low on a sustained basis in the daily chart will signal a pause in the current down trend.

While sustaining above 56,000 levels on a closing basis will signal continuation of the last 10 weeks consolidation.

Report by: Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking

(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing)

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