NIFTY-Weekly Outlook-Venkat's Blog

The past week saw a repeated attempt of 19460-480 range and got sold-off. The selling pressure is expected to continue till we see a spike above 19520-640 range on a closing basis. The Index made fourth bearish candle on weekly chart. It remains to be seen if this fall is account of profit booking or a reversal.

A few observations from the weekly charts are:

• The index moved in a range of 229 points viz. between 19482 and 19253
  
• The oscillators of different time frames are showing mixed signals
  
• Monthly Option open interest to drive the direction of the market
  

Expected scenarios for the ensuing week

• The Index closing below the crucial 19520 is a sign of weakness
  
• The index breached the lower end of the channel and going forward the channel trendline would be a barrier which is around 19530
  

Additional interesting observations

• Presently, the outlook appears negative. However, the pace of selling seems to have reduced as we see the index moving in a range of 230-250 points for the past 2 weeks
  
• The support around 19250 is gaining importance as this level is tested twice during the last couple of weeks.
  
• Index may find supports at 19250, 19140, 19040 and the index could face resistances at multiple levels19420,19530 and 19640
  
• There has been a few Gaps created in this bull run
  
• 18818-18908 (28th Jun 23) far off for now
  
• 18972-19079 (29th July 23) far off for now
  
• 19189-19246 (3rd July 23) * at risk
  
• 
  

Final Note

• The Index has stayed well above the long-term trend line and the 200 DMA at 18315 and 55 DMA at 19237
  
• Index has broken the lower end ascending channel at 19440
  
• Whereas, in the daily charts we observe a descending channel with 300 points range with range from 19140-19440
  
• Ensuing week is crucial for a tuff fight between the Bulls and Bears for control
  
• The line of control is 19620 for the Bulls to regain the power and it needs to be in a quick with sharp move else we may see second bout of sell-off
  
• Index made a Doji and fourth bearish weekly candle
  
• The is scenario currently tilted in favour of Bears and is attempting to break the crucial support zone of 19250 for taking the Index below 19K
  
• A close below 19420 suggest that the Index would Index drift towards 19030
  
• Need to remain vigilant as drag can be on both sides and increased volatility due to Monthly option expiry
  
• Expected to consolidate remain in the range of 19030-19630 and any close outside the range requires re-assessment of risk
  
• Apparently there appears two distinct fault lines-the lower one at 19140 and the top one at 19620. There are chances of 200 points move if either of this is breached on a daily closing basis.
  

#Stay Safe

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