NIFTY-Weekly Outlook-Venkat's Blog

Dec 2, 2023

The Index continued its uptrend to scale a new ATH. Multiple factors favoured this move, Viz. the conflict one returning to peacemaking efforts, stable oil price and economic data supporting a possible cap on Interest rates. There was no looking back after the strong resistance at 19870-19900 gave way. The weekly candle still shows bullish nature of the move. As observed in the previous blogs, this appears to be a new intermediary trend emerging. For now, we can safely assume that the base has shifted higher to 19600.

A few observations from the weekly charts are:

• The index moved in a range of 491 points viz. between 19800 and 20291
  
• The oscillators of different time frames are turning positive
  
• Option open interest to drive the direction of the market
  

 
Expected scenarios for the ensuing week

• Index appear to have moved to the stage 2 of a new Intermediary trend.
  
• Since the Index has posted a new ATH, there are no reference points on the upside. Only projected levels based on studies can be taken for references
  
• Additional interesting observations
  
• Bulls regained the full control upon break of 19870
  
• Index may find supports at 20110, 20030, 19940 the index could face resistances at 20370, 20480, 20610
  
• Though the earlier gaps got covered during the down move, and new gaps have been created around the same levels.
  
• 18972-19079 (29th July 23) Covered ** Created again as 18990-19129
  
• 19189-19246 (3rd July 23) Covered ** Created again as 19144-19247
  
• 19443-19651 (15th Nov 23)
  
• 19889-19976 (28th Nov 23)
  
• 20133-20194 (29th Nov 23)
  list]
  Final Note
  
• The Index has stayed well above the long-term trend line and the 200 DMA at 18761 and stays above 55 DMA at 19605
  
• Index has been continuously posting gains for the past 5 consecutive weeks
  
• Appears that many are jumping in aggressively which could be due to missed out syndrome.
  
• Additional 2 gaps have been created during last 2 sessions
  
• The Index has breached the descending channel at 19570 and moved swiftly after this breach. The potential target for this would be about 900 points which is around 20470.
  
• Even if there is a reactive decline after 5 weekly gains, a few occasions in the past shows clear signs of a new trend emerging after such sharp gains (Refer june 22 & Mar 23)
  
• The Index is likely to consolidate between 20K and 20.5K
  
• State Poll results and changes in Geo-political scenrios may have impact on the upward momentum
  
• This time the fault lines are at 20370 and 19970. There are possibilities of a full blown break-out if 20370 is breached on closing basis which can trigger more stops and the Inde could see 20500+ quickly
  
• Fresh flows and regular SIPs to support for a consolidation
  
• Though the Index closed near the top of the range and the momentum still favours further gains, it is prudent to be cautious once we reach the target of 20500 zone.
  #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.