I’m back with my EOD analysis of the Nifty and Bank Nifty index for the trading day 5th March.
My last post on this subject was eery in it’s prognosis for the Bank Nifty in particular. Check out the lows on the index.
Let’s look at what things are in store for us for Monday :
After a strong move in the US markets overnight, it is a foregone conclusion that we will have a gap-up opening on Monday.I’m looking for an opening around the 5135 level, maybe higher.The question is what happens after that. For the answer let’s look at the charts.
First the Nifty :
We had a gap-up opening on Friday, but the buyers were unable to drive prices higher than 5117.Sellers soon arrived on the picture, and were able to drive prices down effortlessly to 5065 which is a major MP zone and we had a bounce.The day action showed the presence of sellers at higher levels, but also showed that buyers were willing to buy dips.
So on Monday, we wait after the open to see if the buyers can show up to take the index away from the opening price.If we see a repeat of friday, then sellers will step in again.Incidently, the value close and the POC pointed to a higher open even before the US moves.
Bank Nifty : I have been watching this index carefully for the past one week now and seen how buyers have held the 8960-8980 level strongly all week.Strength in the index continues till this level is held.The value close is higher and the POC is moved to 9050 suggesting a higher opening and the renewed presence of new buyers.
From a swing trading 1-5 day view, I see both indexes showing signs of buying exhaustion. We have had a 200 point move in the Nifty from Budget day and the entire action has been above POC and VAH, in the next session. Friday was the first day, sellers arrived.So on Monday, I will be watching out more for the return of the seller.