NIFTY-Weekly Outlook-Venkat's Blog

Nifty attempted to hold on the gains made in the previous weeks. However, it could not gain higher levels and saw a steady sell-off in the last three sessions. The range is almost the same as that of the previous week. However, it would appear like a bearish engulfing candle on the weekly charts. With 17770-90 region holding for the third consecutive weeks, we may see a consolidation during the ensuing week.

A few observations from the weekly charts are:
Weekly charts suggest that

• The index moved around 245 points viz. between 17795 and 18251
  the oscillators are showing negative signals
  Option OI is expected to drive the market direction
  17770-790 continues to be the crucial support zone
  

Expected scenarios for the ensuing week


*Though closed at 17859, the Index is expected to open higher
A new Gap between the closing 17859 and 18100 is likely to be created
Going forward the 18350-18470 zone, is likely to be a major barrier
For the ensuing week, the index may find supports at 18080, 17960, 17770, and the index could face resistances at 18180, 18270, 18360 & 18480

Additional interesting observations

*FIIs and DIIs were net negative
Two possible scenarios
Expected range of 17970-18420 or 17770-18360
Any close outside the range of 17770-18420 requires re-assessment of risk

Final Note


*The crucial support at 17779 holding for the third consecutive week gives hope for some recovery and even a possible attempt closer to the recent peak.
Even at the cost of repetition the following two observations are reference levels for the future
If we take the Fib retracements so far the correction has been 1108 points. The Annual gain has been 3704 points from 15183 to 18887. One third correction would fall at 17666 and a 50% correction would mean 17035
The Index seem to move 220 points on either side by taking 18020 as Pivot
The technical factors indicate a mixed signal
The index is caught in a tiny triangle with base at 17800 and top at 18320
There are chances for upside if the Index closes above 18360 with sharp move to gather momentum
On the contrary, many indicators suggest a fall towards 17320 and the 17035
There appears to be a reasonable similarity between the formation during first week of Oct 22 and first week of Jan 23.
If we see a sharp reversal this week the formation in the line charts would be a double bottom and we may possibly see an upward trend towards the top of the channel
Very exiting week ahead

Disclaimer: The views expressed here are personal and not connected to SYFX Treasury Foundation. The views are for learning and reference purpose only.