By Rohan Patil
For the second consecutive week Nifty weekly candle closed in green and has formed a bullish hammer candle sick pattern on the weekly time frame. We have seen a strong reversal from the 15900 levels when prices reached near the lower band of the flag pattern and then prices reverse sharply and have almost given a breakout on the daily chart.
The multiple bullish candlestick formations formed on the daily as well as weekly time frame which indicates a bullish confirmation in the immediate next week adds lots of importance for the validity of the candlestick pattern.
The immediate support for the Nifty is placed near 16100 and below that 15900 will act as a major support for the Nifty. The immediate resistance for the Nifty is placed at 16700 levels where 50- day exponential moving average is settled.
Bank Nifty outperforming
Bank Nifty outperformed the benchmark index for this particular week and has given weekly return of almost 4 percent and closed convincingly above 35000 mark. Banking index on the daily chart has given a flag pattern breakout and closed above its trend line support.
Bank Nifty for the initial days of the week shown the strength and was continuously taking support near its lower levels and at that time Nifty was underperforming the Banking index. And later on Bank Nifty taken the charge and broke the flag pattern and given a strong breakout above its 21-day exponential moving average.
By analyzing the daily chart one can expect that prices will continue to trade higher and will continue to outperform the Benchmark index in the coming week too.
The immediate support for the Bank Nifty is placed near 35000 and below that 34500 will act as a major support for the Bank Nifty. The immediate resistance for the Bank Nifty is placed at 36000 levels where 100- day exponential moving average is settled.
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The prices were trading in a basing pattern formation since last one month and formed a base support near 490 levels. Prices have formed a falling channel pattern formation on the daily chart where upper and lower band are locked within the range of 40 points.
Counter on May 25 has given a falling channel pattern breakout above its trend line resistance which is placed at around 512 levels on the daily time frame. In this recent uptrend from 500 to 515 prices close closed above its 21 & 50 – day exponential moving averages on the daily scale. Indicators and oscillators are also indicating an uptrend for the short to medium term in the counter.
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After completing a bullish ABCD Harmonic pattern near 1700 levels stock has continuously shown the strength and has taken an anchor support near its 100 – week exponential moving average on the weekly time frame.
The counter has consolidated for more than two months and has outperformed the Nifty midcap index on the relative basis. The Midcap100 index was in the bearish mode and the stock on the other hand keeps consolidating and has given a breakout above its downward sloping trend line.
Overall the Oscillator has also shown the reversal from the oversold zone and currently reading marginally above the 50 levels with bullish crossover on the cards.
(Rohan Patil is a Technical Analyst at Bonanza Portfolio. Views expressed are the author’s own, please consult your financial advisor before investing.)