NIFTY-Weekly Outlook-Venkat's Blog

The selling pressure continued in spite of 21900 lending support. Finally the bears managed to break and took the Index to 21700 making one thing completely negative as the much stronger support one of 21770-840 giving up easily. The subsequent sessions provided relief for a recovery past the 22K mark and ended the week with a positive candle, giving some hope for the bulls. The ensuing week is crucial and will there be sharp recovery or a continuation of the fall?

A few observations from the weekly charts are:

• The index moved in a range of 470 points viz. between 22180 and 21710
  
• The oscillators of different time frames are stretched and showing mixed signals
  
• Monthly, Quarterly and Annual closing and related Option open interest to drive the direction of the market
  

Expected scenarios for the ensuing week

• Volatility and choppy moves likely to continue for couple of weeks
  
• Index staying below the 22240 a negative sign and
  
• Additional interesting observations
  
• Index posted a bullish candle attempting to make a comeback and faces challenge in getting back in to the minor trend channel which it broke. However, still within another channel of medium term
  
• Index may find supports at 21910, 21770, 21660 and the index could face series resistances at, 22130, 22240,,22350 & 22475
  
• 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 21901 and the 200 DMA at 20327
  
• The weekly charts suggest that the Index has breached one minor trend channel due to which it slid to 21710 well below the 55 DMA and luckily recovered from there. However, it is well within a medium term trend channel.
  
• The notable observation is that the daily charts show signs of tun-around of Oscillators and expect 21700 to hold. The scenario of 21640 22640 are the larger range indicated.
  
• Most likely scenario would be a consolidation between 22770 & 22350. Breach on either side requires reassessment of risk
  
• In the past few years the March month has produced strong moves which are mostly in the direction of the trend. It remains to be seen how the scenario unfolds
  
• With the Monthly, Quarterly and Annual closing due this week coupled with a truncated week will see increased volatility and choppy moves. This requires cautious approach
  
• Upside potential seems limited until we see a daily close above 22240-350 range
  
• Uncertainties on account of the forth coming elections would keep the gains restricted
  
• Ensuing week is crucial for deciding the future direction and the 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.