The trends on Gift Nifty also indicate a gap-up start for the Indian benchmark index. The Gift Nifty was trading around 22,685 level, a premium of nearly 110 points from the Nifty futures’ previous close.
On Friday, the benchmark equity indices closed around a percent lower dragged by profit booking across sectors.
The Sensex dropped 732.96 points, or 0.98%, to close at 73,878.15, while the Nifty 50 settled 172.35 points, or 0.76%, lower at 22,475.85.
Nifty 50 formed a long bear candle on the daily chart, which has engulfed the small range candle of the last few sessions.
“Technically, this pattern could be considered as a bearish engulfing pattern, and this suggests some more weakness ahead. Nifty on the weekly chart formed a gravestone doji type candle pattern at the new highs. Normally such a doji pattern after a reasonable upside bounce alerts reversal on the downside. Hence, bulls need to be cautious at the highs,” said Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities.
He believes the short-term trend of Nifty seems to have reversed down.
“The higher top of the bullish pattern is likely to have completed on Friday at the swing high of 22,794 levels and the short-term downward correction is expected in the coming sessions. Immediate resistance is at 22,600 and the next downside levels to be watched are around 22,120 levels,” Shetti added.
Nifty 50 Prediction
The Nifty 50 index witnessed sharp decline from the all-time highs on May 3 and closed the day lower by 172 points.
“The Nifty index is showing signs of near-term bearishness as it forms a double top pattern on the daily chart, coupled with a bearish engulfing candle. This suggests a sell-on-rise approach in the market. Confirmation of the double top pattern would require follow-up selling in the upcoming week. Immediate resistance is noted at the 22,600 – 22,700 zone, where aggressive call writing has been observed in the options market,” said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.
On the downside, Shah believes the index has immediate support at 22,300, and a breach below this level could accelerate the downside momentum.
Also Read: Buy or sell: Vaishali Parekh recommends three stocks to buy today — May 6
Bank Nifty Prediction
The Bank Nifty index declined 308 points to close at 48,924 on Friday, forming a bearish candlestick pattern on the daily charts.
“The Bank Nifty index faced selling pressure from higher levels but maintained its uptrend, closing near the immediate support of 49,000. Immediate resistance is at 49,200, and a break above could trigger short-covering moves towards 49,500 levels,” Shah said.
Conversely, immediate support lies at 48,800 – 48,700, and a breach might lead to further downside towards the 48,400 mark, where the 20 DMA is situated, he added.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 06 May 2024, 07:18 AM IST
