NIFTY-Weekly Outlook-Venkat's Blog

The past week saw a narrow range and every attempt was punished with sell-off during the first four sessions. The Friday’s market action appeared a stand-out and saw a strong bull candle and helped in closing near the high of the week. The Index finally made a bullish candle after five bearish candles on weekly chart which is a positive sign. The base around 19220-250 is holding for now.
A few observations from the weekly charts are:

• The index moved in a range of 223 points viz. between 19223 and 19458
  
• The oscillators of different time frames are showing positive signals
  
• Option open interest to drive the direction of the market
  

Expected scenarios for the ensuing week

• The Index closing close to the top of the descending channel on daily chart
  
• Probability of breach seems higher as seen from the other indicators
  
• The index breached the lower end of the channel and going forward the channel trendline would be a barrier which is around 19810
  

Additional interesting observations

• The outlook appears to be turning positive with the crucial support at 19200 is holding for now
  
• The support around 19200-250 range is gaining importance as this level is tested four times during the last few weeks.
  
• Index may find supports at 19330, 19220, 19120 and the index could face resistances at multiple levels 19570 and 19670, 19780
  
• 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) * being attempted but held for now
  

Final Note

• The Index has stayed well above the long-term trend line and the 200 DMA at 18374, however, the Index moving back and forth of 55 DMA at 19370 is a matter of concern
  
• In the weekly charts the Index has broken the lower end ascending channel
  
• Whereas, in the daily charts we observe a descending channel with 400 points range with range from 19070-19470
  
• The line of control has shifted down to 19570 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
  
• The is scenario currently tilted in favor of Bulls as the crucial support zone of 19250 held well for the past three months including the current month till now. The significance of 19180-250 zone comes from the Fib retracements of the move viz. 16870 to 19990. And also, the Lows of July 23 and High of June 23
  
• A close above 19420 suggest that the Index is likely see higher levels towards 19770
  
• Need to remain vigilant as drag can be on both sides and increased volatility due to Monthly closing candle. A monthly close below 19200 would signify a bearish engulfing pattern and the next thing to look for would be 18800.
  
• Expected to consolidate remain in the range of 19130-19630 and any close outside the range requires re-assessment of risk
  
• August series Option exposure build up has kept the Index lower. It remains to be seen the bets for new Sept series
  
• Apparently there appears two distinct fault lines-the lower one at 19170 and the top one at 19570. 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.