Pre- Market Commentary: Nifty has short-term support placed at 24000-23800 levels

MUMBAI, 26 AUGUST: NIFTY formed a bullish engulfing candle with a small lower shadow signalling buying demand at lower levels around the rising trendline joining last 4 months lows. The index in the process closed above the 20- & 50-days EMA. In the coming sessions, a follow through strength above last week high 24,360 will signal extension of the pullback towards 24,550 and 24,700 levels in the coming sessions. While failure to move above last week high will signal consolidation in the range of 24,000-24,350.

Overall index is expected to extend the recent consolidation and trade in the broad range of 24,000-24,700 in the coming sessions.

The daily 14 periods RSI has generated a buy signal moving above its nine periods average thus supports the positive bias in the index. Nifty has short-term support placed at 24,000-23,800 levels.

BANK NIFTY to extend the current consolidation and only a breakout or breakdown will signal a directional momentum

Bank Nifty formed a small bullish candle which mostly remained contained inside previous session price range signaling consolidation with positive bias as buying emerged from the 50 days EMA. The broader 8 weeks consolidation range remains intact between 56,500 and 58,700. We expect the index to extend the current consolidation and only a breakout or breakdown will signal a directional momentum.

Within the consolidation index is facing resistance around 58,000 levels. Index sustaining above the same will open upside towards 58,500-58,700 levels in the coming sessions being the upper band of the recent consolidation. While failure to move above 58,000 levels will signal consolidation in the range 57,000-58,000 levels in the coming sessions.

In the smaller time frame Bank Nifty in the last 16 sessions is seen consolidating in a narrow range retracing just 50% of its previous 7 sessions up move from 56,023 to 58,248. A shallow retracement signals higher base formation.

 REPORT BY: Bajaj Broking Research

(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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