Daily Nifty Report 9th August 2016

Today Nifty opened soft, keeping eye on RBI monetary policy and remained weak most of the day. Reserve Bank of India kept its benchmark lending rate unchanged in line with market expectation. Volatility increased after the announcement and market closed at 8697 down by 44 points before it recovered from its day's low around 8660.

 

Nifty in its daily chart has formed a spinning top candlestick pattern. This type of pattern implies that the market find supply at higher level and after a strong rally its lacking momentum. However, the low at 8660 level is the key for the pattern. Going forward a move below this level we may see profit booking to trigger.

 

Overall we expect a short term correction if market move below 8660 level. However as the medium term trend is extremely bullish any medium term pull back or correction is expected to reverse quickly and should found support at 8400-8450 level. On the upside resistance is visible around 8720-8750.

 

Going forward market movement will depend on FII and DII trading activity, movement of crude oil in international market which is trading at its two weeks high. Industrial and manufacturing production data and rate of inflation which will scheduled to release this week on Friday is likely to move investor sentiment.