NIFTY-Weekly Outlook-Venkat's Blog

The market witnessed a steady decline as the index was unable to clear 19840-50 range in couple of attempts during the week and finally closed at 19542 after testing a low of 19512. The change in Geo-political risk perceptions coupled with the increasing in interest rates were major cause of concern for equity markets across geographies. In the process the earlier week’s gain stands nullified. With territorial conflicts and Month end Option expiry during the week, markets are expected to remain volatile.

A few observations from the weekly charts are:

• The index moved in a range of 337 points viz. between 19849 and 19512
  
• The oscillators of different time frames are showing mixed signals
  
• Monthly Option open interest to drive the direction of the market
  

 
Expected scenarios for the ensuing week

• Index erased the gains made during the previous week
  
• After removing the outliers, the Nifty Index is moving in an ascending channel with a top at 20460 and lower end support at 19460 with a pivot at 19960
  

Additional interesting observations

• The Bears still holds fair control and would continue to attempt selling every rally till the index is below crucial zone of 19880 – 19960
  
• Index may find supports at 19460, 19340, 19260 and the index could face resistances at multiple levels 19640, 19770, 19840, 19960
  
• 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 18594 and is moving back and forth of the 55 DMA at 19613
  
• The Index is moving in an ascending channel and it appears that there are chances that the Index may consolidate in a smaller range before taking further direction
  
• The channel support is at 19460. While the present scenario appears negative, the support at 19460 is expected to hold. In case if breached then we can expect a slide towards 19330 which could well be seen as an opportunity for long positions
  
• Expected to consolidate in the range of 19460-19960 and any close outside the range requires re-assessment of risk
  
• The weekly chart has a hammer and a confirmation and the target extends till 20500 and the next question is the time frame. This would get negated if the Index breaches 19250 on a closing basis. Ideally it would be good for the market to consolidate after every stage higher by 300-350 points.
  
• The distinct fault lines lie at 19450 on the lower end and 19880 on the higher end
  
• The ensuing week is expected to be volatile and likely to see whipsaw moves due to changes in Geo-political risk perceptions and the Monthly Option open Interests
  
• 
  

#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.