StockEdge Morning Market Analysis - 27th August
The Nifty gained 187 points over the day to close at 25,010, marking a strong session in the markets yesterday. The index crossed the 24,850 level and closed above it, with almost all sectors ending in the green and broad-based participation. The Metal index was the top gainer, as discussed yesterday (based on the dip in the Dollar Index), followed by the real estate sector.
Technically, the index has strong momentum. After 10 days of consolidation in the first half of August, the bulls are back with force. The monthly charts are particularly interesting; on the 1st of August, the index was above 25K, and in 26 days, it completed both price and time-based corrections and is now back above the 25K level. This has allowed the indicators to cool off well, with no signs of exhaustion. The immediate resistance level is 25,100, and based on Fibonacci extensions, the next target for the index comes around 25,350.
The 24,850 level is now immediate support, with 24,550 as the base.
The IT index remains strong and could see further upside momentum. Bank Nifty is still sluggish, but it's only a matter of time before it catches up. The renewed momentum in the Metal index, due to global factors, has lifted the trend. The immediate resistance for this index is at 9,500; once cleared, further upward movement is likely.
The Dow Jones created a new high yesterday but didn’t close at that level.
To conclude, 25,100 and 25,350 are the next working targets on the index, with the overall trend remaining up. Dips will be a buying opportunity.
Nifty
Bank Nifty
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