August month has been very volatile for Equity, Currency and Commodity markets. Nifty as on 29th august 2019, the closing was flat in comparison to the previous month closing, but it has seen lots of volatility and has made a low of 10637. However, it bounced back above 11000 due to positive government announcement.
Similarly, USD/INR also made multi-month highs and is trading above 72 level marks(on the day of writing this article). Similarly for GOLD which trading above 39000 at the time of writing and touched life highs on MCX. So overall it was quite a bad month for the Equity market.
At present Nifty trading nearer to 11000 marks and we believe that 10600 level is short term bottom for the market. Now the problem is that domestic cues are not turning positive but Global market is showing big volatility with fear of recession, trade as well as a currency war. So going forward, nifty is likely to remain volatile with buy on strategy will work out very well until nifty hold level of 10600.
As seen in the chart below, Nifty has seen trend line resistance at 11142-11150 five times and retraced from those levels. It never closed above that level. So once Nifty closes above 11150, we can see another rally up to 11240 where 200EMA is present and then 11440 levels where another trend line resistance comes as shown in the chart below.
Now after looking at detail chart study, we can surely say that we won’t get any big negative news from the global market, nifty probably made bottom at the level of 10630 which is a low made a few days earlier
If banknifty closes above 28500 then it will surely bounce back up to 29000 and then 29500 levels where it will face strong resistance. For Bank Nifty, too, we believe that low has been made and if there is no major negative news from the global market, then buy on dips will be the correct strategy for banknifty also.
