NIFTY-Weekly Outlook-Venkat's Blog

The Index crossed the key resistance one of 22510-530 and posted a new ATH of 22775. However, it is seen struggling to maintain the gains and ended the week with a bearish candle after three weeks of positive candles. The Index is moving in channel and is expected to decline towards the lower end of the support and consolidate before taking further direction.

A few observations from the weekly charts are:

• The index moved in a narrow range of 272 points viz. between 22775 and 22503
  
• 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
  
• After 3 weeks of strong gains the Index is facing profit booking and the perception seems to be turning negative
  
• Index breaching 22500-530 would see quick slide towards 22220 and possibly a panic selling towards 22070
  

Additional interesting observations

• Index posted a bearish candle and seem to reverse from the top of the channel at 22775 which indicates the consolidation phase
  
• Net milestone of 23K appears to be in trouble and is expected to take longer time to achieve
  
• Index may find supports at 22370, 22220, 22070 and the index could face series resistances at, 22620, 22770, 22880
  
• 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 22066 and the 200 DMA at 20552
  
• The weekly charts suggest that the Index is moving in an ascending channel with top at 22870 and lower end support at 22120
  
• The notable observation is that the daily charts show signs of deep trouble unless gains 22700 and the likely move towards 22K if key support at 22220 breaches and below 22K would be considered as deeply negative for a slide towards 21600
  
• Most likely scenario would be a consolidation between 22040 & 22620. Breach on either side requires reassessment of risk
  
• In the past few years the April month has produced higher levels yet the closing has been mixed. It remains to be seen how the scenario unfolds
  
• The Index posted a new ATH. However, it got sold-off to close around the same 22520 zone.
  
• The Q4 results expected to be positive and keep the markets at higher levels. However, the uncertainties on account of the forth coming elections would keep the gains subdued
  
• Ensuing week is crucial for deciding the future direction and the target
  
• Going by the technical indicators the broader range for April is 21920-22765. Breach on any side requires re-evaluation
  

#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.