Nifty trend for Tuesday

Indian markets on Monday posted one of their best performances on Budget Day. Nifty jumped 4.75 per cent and closed at 14,281 levels. Bank Nifty and Nifty Private Bank gained more than 8 per cent. Meanwhile, India VIX ended down by 8 per cent.   

The price action of the day formed a sizeable bullish candle, and this sizeable bullish candle surpassed the move of September 20, which was seen on the back of the corporate tax cut. On September 20, Nifty had closed with gains of 569 points while on Monday i.e. on Budget Day, it closed with gains of 647 points. Technically, Nifty has retraced 61.8 per cent of its previous fall and erased all the losses of the last three days’ fall. Nifty Futures recorded the highest volume since March-April.  

Nifty on January 25 slipped below its 20-DMA and on Friday, it closed below the 50-DMA. With a strong move on Monday, Nifty touched its 20-DMA and closed above the 50-DMA. Going ahead, Monday’s high of 14,331 is going to be a crucial level to watch out for as sustaining above this level would only mean that the bulls are getting stronger, and it would soon reclaim the level of 14,500 and 14,640 in the near term. Meanwhile, on the downside, the level of 14,220 is likely to act as important support while the next support is seen around 14,040 levels.