NIFTY-Weekly Outlook-Venkat's Blog

The Index managed a smart recovery towards the earlier peak and closed with a positive candle for the week. The risk perceptions seem to tilt towards a positive bias. However, this time the moves were steady after initial sell-off on the first day of the week. Cautious approach continues as the perception is that the ATH is a strong supply zone and bears may make all attempts to initiate fresh shorts around the known ATH. This week is crucial for the further direction and the target

A few observations from the weekly charts are:

• The index moved in a range of 422 points viz. between 221875 and 22297
  
• The oscillators of different time frames are stretched and showing mixed signals
  
• Monthly Option expiry & open interest to drive the direction of the market
  
• Expected scenarios for the ensuing week
  
• Volatility and choppy moves likely to continue for a couple of more weeks
  
• There appears a slowdown of pace around 22300
  

 
Additional interesting observations

• Index managed to scale a new ATH and posted a bullish candle. However, Friday’s price action sends confusing signal
  
• Index may find supports at 22140, 22030, 21870 and the index could face resistances at, 22350 and 22470, 22580
  
• There were multiple gaps created during this dream run. The levels were repeatedly mentioned in the previous blogs. Since they are far away for now, they will be inserted back when relevant
  

Final Note

• The Index has stayed well above 55 DMA at 21620 and the 200 DMA at 19967
  
• There is a striking similarity between the formation in the weekly chart and that of the Monthly charts a few weeks ago where we saw a break above the triangle formation lead to a big up move.
  
• The fault lines lies at 21830 at the lower end and 22370 on the higher end.
  
• Most likely scenario would be a consolidation between 21930 & 22460. Breach on either side requires reassessment of risk
  
• There is no reversal signal seen yet and it appears like an extended rally
  
• With the monthly option expiry due this week, the market is expected to remain volatile and witness choppy moves. This requires cautious approach
  
• The ensuing week is crucial to decide further direction and target
  

#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.