Nifty has been in the long running parallel channel and this week took support from the bottom of the channel and the trendline from ATH on 19th Oct where it has taken multiple support and resistance.
Scenarios for the next week: -
Scenario 1: -
1. On the line chart, Nifty is forming a double bottom with bullish divergence on Daily RSI (14) so a bounce is expected at the start of next week.
2. It should test the trendline drawn from 19 Jan where it has faced resistance multiple times.
3. Depending upon which day it reaches the trendline it will again be at 16600-16800 which has been a strong resistance zone.
4. If the trendline breaks then Nifty can move up to the middle of the channel thereby closing the gap formed between 16800 and 17050.
Scenario 2: -
1. Nifty could test the trendline drawn from 19 Jan and could then fall to take either support from the bottom of the parallel channel.
2. In the scenario where it could break the channel the trendline from ATH and the cluster of support from Jun-Jul of last year will also act as support.
3. This region of 15600-15900 is predicted by most analysts to be a strong support zone in the medium term for Nifty.
Possible risks: -
Further deterioration in geopolitical news could see Nifty falling again from start of the week and take support in the cluster zone.
Scenarios for the next week: -
Scenario 1: -
1. On the line chart, Nifty is forming a double bottom with bullish divergence on Daily RSI (14) so a bounce is expected at the start of next week.
2. It should test the trendline drawn from 19 Jan where it has faced resistance multiple times.
3. Depending upon which day it reaches the trendline it will again be at 16600-16800 which has been a strong resistance zone.
4. If the trendline breaks then Nifty can move up to the middle of the channel thereby closing the gap formed between 16800 and 17050.
Scenario 2: -
1. Nifty could test the trendline drawn from 19 Jan and could then fall to take either support from the bottom of the parallel channel.
2. In the scenario where it could break the channel the trendline from ATH and the cluster of support from Jun-Jul of last year will also act as support.
3. This region of 15600-15900 is predicted by most analysts to be a strong support zone in the medium term for Nifty.
Possible risks: -
Further deterioration in geopolitical news could see Nifty falling again from start of the week and take support in the cluster zone.
Comment:
Forgot to mention this. On the daily, Nifty formed a Spinning top candle which at support is a further sign of bullishness.
Comment:
As expected Nifty is at the trendline and it is currently testing it. Since it is a big gapup plus expiry today, tomorrow is going to be an important day for further bullishness. Watch out for some small pullback before it continues its upward journey again.