NIFTY-Weekly Outlook-Venkat's Blog

The market witnessed a struggle to retain control by Bulls and Bears. Unlike the previous week, the intensity was lesser, except for the month end option expiry which saw sharp fall. However, the Friday’s recovery seems to send a message that the game is not over yet. Added pressure was due to a truncated week with monthly, quarterly and half yearly closing. The ensuing week also expected to remain volatile due to holiday at the beginning of the week and the Global cues could have impact when the market opens after a long weekend.

A few observations from the weekly charts are:

• The index moved in a range of 274 points viz. between 19766 and 19492
  
• The oscillators of different time frames are showing mixed signals
  
• Option open interest to drive the direction of the market
  

 
Expected scenarios for the ensuing week

• The ascending channel is redrawn with the new support seen from the lows of the week.
  
• After removing the outliers, the Nifty Index is moving in an ascending channel with a top at 20430 and lower end support at 19540 with a pivot at 20020
  

Additional interesting observations

• The Bears were in total control and would continue to dominate till the index is below crucial zone of 19880 – 19960
  
• Index may find supports at 19540, 19440, 19250 and the index could face resistances at multiple levels 19770 and 19880, 19940, 20060
  
• There has been a few Gaps created in this bull run
  
• 18818-18908 (28th Jun 23) far off for now
  
• 18972-19079 (29th July 23) far off for now
  
• 19189-19246 (3rd July 23) far off for now
  
• 20063-20133- Got filled yet a new Gap created 20133-19980*
  
• 
  

Final Note

• The Index has stayed well above the long-term trend line and the 200 DMA at 18497 and is hovering around the 55 DMA at 19628
  
• The ascending is redrawn with the levels supported during this week and it appears that there are chances that the Index may bounce back or at least consolidate in a smaller range before taking further direction
  
• Even after more than 50% fall, the September series so far has proved to be positive
  
• Expected to consolidate remain in the range of 19460-19960 and any close outside the range requires re-assessment of risk
  
• The fall has been very sharp and the 0.618 Fib retracement at 19620 and then the next 0.786 Fib retracement at 19450 are crucial
  
• Expect the regular SIP investments to support for a consolidation above 19500
  
• The distinct fault lines lie at 19450 on the lower end and 19880 on the higher end
  
• Any breach below 19490 would result in a fatal slide towards 19240 and then 19120
  

#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.