NIFTY-Weekly Outlook-Venkat's Blog

Aug 12, 2023

The past week saw a repeated attempt of 19620-650 range and got sold-off. The selling pressure is expected to continue till we see a spike above 19640-770 range on a closing basis. The Index made third 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 233 points viz. between 19645 and 19412
  
• The oscillators of different time frames are showing negative signals
  
• 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 only saving grace is that it is just hanging around the lower end of the channel
  
• Index may find supports at 19320, 19180, 19040 and the index could face resistances at multiple levels19640,19770 and 19810
  

Additional interesting observations

• The outlook for the Index presently a neutral bias as long as the range of 19300-19700 remains intact
  
• 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 18280 and 55 DMA at 19177
  
• Index is moving in an ascending channel having a depth of about 700 points. The top of the channel at 20140 the lower end at 19440 and median at 19790 Currently the Index is below the mid-point of the channel,
  
• Whereas, in the daily charts we observe a descending channel with 450 points range with range from 19440-19990
  
• Ensuing week is crucial for a tuff fight between the Bulls and Bears for control
  
• The line of control is 19700 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 an inside candle though it is a bearish one
  
• The is scenario currently tilted in favour of Bears and is at the crucial support
  
• Will the Bulls breathe fire like Indian Hokey team? Will be known by this week
  
• A daily close below 19420 would see the Index drift towards 19030
  
• Need to remain vigilant as drag can be on both sides
  
• Expected to consolidate remain in the range of 19230-19730 and any close outside the range requires re-assessment of risk
  
• Apparently there appears two distinct fault lines-the lower one at 19420 an the top one at 19720. 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.