NIFTY-Weekly Outlook-Venkat's Blog

Nov 17, 2023

The opening week of the Samavat 2080 saw fireworks on the D Street. The Index scaled back the Oct peak. However, the last hour of the Option expiry day saw a sudden decline. Could be that market sensed some regulatory changes on the capital requirements on specific risk assets. However, the weekly candle still shows bullish nature of the move. Comparing the past this appears to be a new intermediary trend emerging. For now, we can safely assume that the base has shifted higher to 19430.

A few observations from the weekly charts are:

• The index moved in a range of 389 points viz. between 19486 and 19875
  
• The oscillators of different time frames are turning positive
  
• Monthly Expiry & Option open interest to drive the direction of the market
  

 
Expected scenarios for the ensuing week

• Index appear to be at stage one of a new Intermediary trend. However, there are multiple hurdles ahead of the path
  
• Re-attempt of 20K- What appeared as a herculean task a few weeks back, seems possible with the past three successive weekly gains
  
• Additional interesting observations
  
• Bears made a surgical strike on the expiry day
  
• Index may find supports at 19620, 19510, 19400 and the index could face resistances at multiple levels 19870, 19980 & 20070
  
• Though the earlier gaps got covered during the down move, and new gaps have been created around the same levels.
  
• 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
  
• 19443-19651 (15th Nov 23)
  

Final Note

• The Index has stayed well above the long-term trend line and the 200 DMA at 18708 and moved swiftly after crossing the 55 DMA at 19570
  
• Last week’s observation “On a contrarian view, if the index crosses 19600 on a closing basis, what next? Can we conclude that a new wave starts for a new ATH or at least 19850(from where the downfall started)” – Market read it right?
  
• If the Index survives above 19530 during this week on a closing basis, there are fair chances of the Index attempting 19840 during next week- Why wait? Done during the week itself
  
• 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. It would be negated if the Inde falls back below 19430 and re-entres the channel
  
• Even if there is a reactive decline after 3 weekly gains, a few occasions in the past shows clear sighns of a new trend emerging after such sharp gains (Refer june 22 & Mar 23)
  
• One key observation is that normally there would be one strong first candle flowed by subsequent comparatively smaller candles. Surprisingly, we see a much stronger third weekly candle. Indicates a big move ahead? Net 2-3 weeks would throw better picture
  
• The Index is likely to consolidate between 19500 and 19900
  
• We need to see multiple closing above 19600 to see further gains
  
• Monthly option expiry happens during the week which might keep the market volatile
  

#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.