Technical & Derivatives Report 9th September 2019: Angel Broking
By Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"During the last week, index opened with a big gap down on Tuesday mainly on the back of escalated trade war between US and China over the weekend. This development was fuelled by our weak GDP numbers and hence, after some consolidation, the selling momentum accelerated at the stroke of the penultimate hour which lasted till the closing point of the day. Eventually Nifty ended with a mammoth cut over 200 points. On the following day, the selling resumed but fortunately things cooled off at a global front, which resulted into a gradual recovery throughout the remaining part of the week.
Now in terms of levels, we are almost unmoved on a weekly basis but the development that happened during the week was encouraging and adds further conviction to our previous week's optimistic stance. In the previous article, we had highlighted few notable observations which are hinting towards some hope of relief in the September month. Addition to that, we can see a possibility of base shifting higher to 10746 from 10637. The weekly charts of Nifty and Bank Nifty exhibits copy book 'Bullish Dragonfly Doji' patterns and the Nifty Midcap 50 depicts a 'Bullish Hammer' around the cluster of supports. We also did some time analysis for midcap index and as per the historical evidences; the September month is 21st (Fibonacci number) from January 2018 which may possibly turn out to be a reversal point. And now if we try to apply the same theory on Nifty weekly chart, this week would be the 21st week in the 8th zone of 'Fibonacci Time Retracement'. Yes, it sounds extremely optimistic but we remain hopeful and expect the index to initially head towards 11100 - 11180. In fact, we will not be surprised to see this sturdy wall getting demolished quite soon to extend the relief move towards 11350 - 11475. On the lower side, immediate supports are placed at 10867 - 10816 but the validity of above mentioned pointers remains intact as long as key support of 10746 - 10637 remains defended successfully.