The previous week also witnessed a few important technical events. The NIFTY marked its fresh incremental high, but it failed to confirm this attempted breakout. The markets have reinforced the 12000-12040 zone as an intermediate top and key for the markets. The India Index – VIX also declined another 7.53% to 14.86.
Also, the index resisted to the pattern resistance created by the lower of the 30-month long upward that the NIFTY broke on the downside in October 2018. The nature of this is rising and therefore, although the NIFTY marked incremental highs, it resisted to this for the third week in a row.
As we head into another week, we need to take serious note that the markets are likely to face broader technical headwinds. The present technical structure on the charts does not show any possibility of a fresh, sustainable runaway up moves. There may be some intermittent technical pullbacks, but a major up move which is lasting and sustainable is unlikely.
The coming week is likely to see the levels of 12000 and 12080 acting as stiff resistance points. Supports, on the other hand, shall come in at 11750 and 11600.
The weekly is 63.78; it remains neutral and shows no divergence against the price. However, upon visual inspection, the shows forming lower tops, which may act in a way going ahead. The weekly continues to remain and trades above its signal line. No significant formations were observed on the candles.
The pattern analysis shows that the NIFTY continued to resist to the lower of the upward for the third week in a row. The index has also failed to confirm an attempted breakout, and the zone of 12000-12040 remains key for the markets.
We are likely to see some intermittent pullbacks in the coming week. However, such pullbacks may remain temporary, and the markets may continue to see selling pressures from higher levels. With the breakout not getting confirmed, we may see some bias to prevail in the markets. Any technical pullback, if there are any, should be utilized to protect profits at higher levels. While choosing not to chase the technical pullbacks, if any, a highly cautious view should be maintained for the coming week.