VanijyamShala

Nifty Weekly Technical Outlook – 25.07.2020

NSE:NIFTY   Nifty 50 Index
Price Action Analysis:
Nifty advanced for the sixth consecutive week and formed an up bar on a weekly time frame. Price recorded a new high at 11240 and finally closed at 11195. The previous week price bar was a bullish outside bar. With a bullish outside bar we formed a bullish expectation. The bullish expectation was confirmed with price breaking the high of outside bar. From the low of 7511.1 price has traveled a distance of two-third levels of the January quarter and, the weekly close (11195) coincides with the range resistance level of January quarter (11201).

Price action comparative analysis of Nifty Spot and Nifty July Futures
With the start of the week nifty spot opened with a visible gap up at 10999 whereas nifty futures witnessed a soft gap up opening at 10955. On Tuesday price saw a gap up opening both in spot and futures of equal magnitude.
On Wednesday nifty spot again opened with a visible gap up and recorded a low of 11056 and formed a closing price reversal price bar with the close in the middle one third of the range. But nifty futures opened with a soft gap and made a low of 10805 and formed an outside bar with the close in the upper one third of the range. “A clear case of price manipulation according to William Hamilton”. A cautious approach is recommended due to price manipulation.
On Thursday price recorded a new high both in nifty spot at 11240 and nifty futures at 11228. With a down bar on Friday price formed a swing high both in nifty spot and nifty futures . With a swing high in place a bullish expectation can be formed only on price surpassing the recent swing high at 11240. A valid break of the uptrend line with the touch points at 8806 and 10595 will be first indication of change in the ongoing trend.
The current weekly volatility decreased to 2.1 compared to previous weekly volatility of 2.4. The probable weekly returns is of 244 points from the weekly close, with a measured move in increments of 72 points.

Trade Plan
The key level of the existing up trend is at 10562 and the critical level at 10194. The point of control of Nifty Spot for the upcoming week is in the zone of 11097. Price staying above the point of control can find minor resistance in the zone of 11169 and major resistance in the zone of 11240. Price surpassing the major resistance can move towards the zone of 11312 and 11383.
Price breaking point of control at 11097 can find minor support in the zone of 11025 and major support in the zone of 10953. Price breaking below the major support can move lower towards the zone of 10881 and 10809.

Disclaimer
All trade ideas published here are for educational purpose only. All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual’s trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.