NIFTY-Weekly Outlook-Venkat's Blog

Risk perceptions keep altering and post FED’s rate decision to hold the rates the market sentiments improved and a pullback rally is under progress. Remains to be seen whether this is a fresh trend emerging. This week will provide ample clues for this. For now, we can safely assume that the base at 18840 is intact, though there are multiple hurdles for the Index to overcome. The final 2 sessions of the week opened with a Gap which is indicative of bullish bias or reduction of shorts.

A few observations from the weekly charts are:

• The index moved in a range of 336 points viz. between 18940 and 19276
  
• The oscillators of different time frames are showing mixed signals
  
• Option open interest to drive the direction of the market
  

 
Expected scenarios for the ensuing week

• Index attempting a pullback rally. However, there are multiple hurdles ahead of the path
  
• The re-attempt of 20K would be a herculean task, given the change in risk scenarios
  
• Additional interesting observations
  
• Bears might be waiting on the sidelines waiting for signals to re-enter
  
• Index may find supports at 19230, 19120, 19030 and the index could face resistances at multiple levels 19340, 19460 & 19510
  
• Though the earlier gaps got covered during the down move, it is observed that There were multiple Gaps created during the up move, which have been highlighted in the previous blogs. The irony is that, what appeared as far off, got covered in a single week
  
• 18818-18908 (28th Jun 23) Covered
  
• 18972-19079 (29th July 23) Covered ** Created again as 18990-19129
  
• 19189-19246 (3rd July 23) Covered ** Created again as 19144-19247
  

Final Note

• The Index has stayed well above the long-term trend line and the 200 DMA at 18641 and moved sharply away from the 55 DMA at 19545
  
• The Ascending channel support is broken and 19460 could be a strong resistance going forward
  
• With sentiments improving, there are possibilities of attempting the 55 DMA
  
• The distinct fault lines lie at 19120 on the lower end and 19510 on the higher end
  
• The ensuing week is expected to be well supported due to changes in the risk perception and the flows on account of monthly SIP flows
  
• If the Index survives above 19430 during this week on a closing basis, there are fair chances of the Index attempting 19670 during next week, as per Fib projection
  
• The good results posted by top companies have not helped much so far might have impact during the week
  
• We need to see multiple closing above 19500 to see further gains
  

#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.