NIFTY-Weekly Outlook-Venkat's Blog

The market witnessed a scenario which appeared as a complete U-turn of the sentiments. The expectation that the previous high would act as a support also was negated. In just four sessions the Index lost more than 50% of the gains made during the month. The ensuing week remains crucial with the culmination of the weekly, Monthly, Quarterly & Half yearly closing.

A few observations from the weekly charts are:

• The index moved in a range of 521 points viz. between 20195 and 19674
  
• The oscillators of different time frames are turning from positive to negative signals
  
• Weekly & Monthly Option open interest to drive the direction of the market
  

Expected scenarios for the ensuing week

• After removing the outliers, the Nifty Index is moving in an ascending channel with a top at 20340 and lower end support at 19620 with a median at 20042
  
• In the normal course when the prices reach the earlier trend there are possibilities of rejection. Though it stayed above the long term trend for some time, ultimately it failed and was heavily sold-off
  

Additional interesting observations

• The Bears were in total control crucial support zone of 19880 – 19960 gave way easily
  
• Index may find supports at 19630, 19520, 19440 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 18471 and 55 DMA around 19606
  
• In the weekly charts the Index made a failed attempt to get back to the original ascending channel and closed at the lower end of the trading range
  
• 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 support at 19620 and then the next 0.786 Fib retracement at 19450 are crucial
  
• After four consecutive daily negative candles, It is prudent to remain vigilant as drag can be on both sides
  
• The ensuing week remains crucial with the culmination of the weekly, Monthly, Quarterly & Half yearly closing.
  

#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.