Technical Overview – Nifty 50
The Indian markets again witnessed a gap-up opening on 06th November, and it was a strong bullish trading session where prices registered a lifetime high of 20,961 levels with daily gains of 80 points.
NIFTY has broken out of its all-time highs and is ready to head higher in the seasonally strong month of December. Nifty has ended on a positive note in 15 out of the last 20 years in this month. It has generated an average gain of 2.8% in December over the years.
The recent rally from the low of 18,837 to the all-time high of 20,961 took 26 trading sessions, which is equal to the fall from the October high of 20,222 to 18,837. This indicates that the market is in a strong uptrend.
Technical Overview – Bank Nifty
The Bank Nifty on 06th December also witnessed a gap-up opening but due to an overbought oscillator, the prices drifted lower within the first few minutes of the trade and remained under pressure throughout the day.
The Banking index registered its lifetime high levels in the opening trade and due to a profit booking formed a bearish engulfing candle stick pattern on the daily time frame. The higher high higher low formation is well intact on the daily chart and the index is trading above all the important averages.
The momentum oscillator RSI (14) on the daily chart has reached at 80 levels and the distance between the price and the 21 EMA has increased drastically. Overall chances of profit booking at present levels look bright. The major trend remains to buy on dips. The immediate support for the Banking index is placed near the 46,500 – 46,300 levels and the 47,250 levels will remain an immediate hurdle for the time being.
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