Nifty continues to trade in a narrow range rectangle pattern on the daily chart. The width of the rectangle pattern is off almost three hundred points where a lower band of the pattern holds support near 15,600 level and the upper band of the pattern is near 15,900.

For the last couple of trading sessions, the market breadth has been in favour of bulls where advances are more than the declines. DIIs and FIIs have been buying at lower levels.

All these data indicate a majority of stocks are moving out of their conjunction zone.

Momentum oscillator RSI (14) was reading above 70 level on June 15 and since then the oscillator has been reading in a lower high lower low formation on the daily timeframe.

Recently RSI has found support near 50 level and has formed a rounding bottom formation with closing above 55 level with positive crossover.

The current pattern formation in the RSI suggests uptrend may resume soon once the oscillator crosses above 65 level on the daily scale.

If Nifty breaks the upper band of the pattern which is placed near 15,920 then it may witness a major breakout which will help them cross the 16,100 level. Support for the Nifty is placed near 15,600.

Bank Nifty is trading in a higher high higher low formation within the rising channel pattern on a daily scale.

It is trading above its 21 and 50-day exponential moving averages and the gap between the two averages is widening on a daily basis which indicates a strong upward trend is likely to unfold in the banking sector.

Support for the Bank Nifty is placed near the 35,150 level and the upside is capped near 36,800.