The trends on Gift Nifty also indicate a tepid start for the Indian benchmark index. The Gift Nifty was trading around 21,909 level as compared to the Nifty futures’ previous close of 21,959.
On February 2, the benchmark equity indices witnessed high volatility and ended with positive bias.
The Sensex jumped 440.33 points to close at 72,085.63, while the Nifty 50 settled 156.35 points, or 0.72%, higher at 21,853.80.
Nifty 50 formed a small positive candle on the daily chart with a gap up opening and with a long upper shadow.
“Technically, this pattern indicates part of a bearish shooting star type candle pattern (not a classical one). Nifty made an attempt of a false upside breakout of rising wedge type pattern at 21,850 levels on Friday,” said Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities.
The previous crucial opening downside gap (bearish breakaway gap) of 17th January has been filled completely and that has nullified the bearish effect as per the gap theory. Friday’s swing high could also be considered as a double top type formation after the confirmation, he added.
Shetti believes the short-term uptrend status of Nifty remains intact. But the overall chart pattern suggests a possibility of high volatility at the new highs.
“Any attempt of upmove from here could encounter strong resistance around 22,100-22,200 levels and that could possibly result in short-term weakness from the highs,” Shetti said.
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Here’s what to expect from Nifty 50 and Bank Nifty today:
Nifty 50 Prediction
On February 2, Nifty 50 registered a new all-time high at 22,126 levels and that triggered market slip into intraday weakness from the new highs in the mid part of the session. The index ended 156 points higher.
“Nifty surpassed the 22,000 mark during the first half of the Friday session but subsequently formed a double top on the hourly chart. Confirmation of a bullish trend resumption would only occur with a decisive breakout above the double top, which is currently identified around 22,125. Conversely, a break below the support level at 21,500 could indicate a bearish momentum,” said Rupak De, Senior Technical Analyst, LKP Securities.
In the scenario of a breakout above 22,150, he believes Nifty may experience upward momentum, potentially reaching levels such as 22,500 and beyond.
Also Read: Buy or sell: Vaishali Parekh recommends three stocks to buy today — February 5
Bank Nifty Prediction
On Friday, the Bank Nifty index failed to hold intraday gains and ended 218 points lower at 45,971. The index declined more than 900 points from day’s high.
“The Bank Nifty bears regained control as the index failed to surpass the crucial level of 46,500 on a closing basis. The immediate support for the index is situated at 47,700, and a breach below this level is anticipated to intensify selling pressure, potentially pushing the index towards the 45,000 mark,” said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.
Given the heightened volatility in the near term, Shah advises traders to approach the market with caution and implement strict risk management measures to navigate potential fluctuations.
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 taking any investment decisions.
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Published: 05 Feb 2024, 07:25 AM IST