NIFTY-Weekly Outlook-Venkat's Blog

The past week saw a sell-off on three out of five sessions. The selling pressure was more when the Index breached 19520. The Index made second bearish candle. It remains to be seen if this fall is account of profit booking or a reversal.
A few observations from the weekly charts are:

• The index moved in a range of 499 points viz. between 19795 and 19296
  
• The oscillators of different time frames are showing negative signals
  
• Option open interest to drive the direction of the market
  

Expected scenarios for the ensuing week

• The Index breaching the crucial 19520 and the Index making lower lows and lower highs after 18 weeks are signs of weakness
  
• The only saving grace is that it bounced back from the lower end of the channel
  
• Index may find supports at 19320, 19180, 19040 and the index could face resistances at multiple levels19630,19770 and 19810
  

Additional interesting observations

• The outlook for the Index presently a neutral bias as long as the range of 19300-19700 remains intact
  
• 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) * at risk
  
• 
  

Final Note

• The Index has stayed well above the long-term trend line and the 200 DMA at 18230 and 55 DMA at 19063
  
• Index is moving in an ascending channel having a depth of about 700 points. The top of the channel at 20070 the lower end at 19370 and median at 19720 Currently the Index is below the mid-point of the channel,
  
• Whereas, in the daily charts we observe a descending channel with 450 points range with range from 19230-19680
  
• Index still has an unfinished agenda of scaling 20K
  
• Ensuing week is crucial for a tuff fight between the Bulls and Bears for control
  
• The line of control is 19700 for the Bulls to regain the power and it needs to be in a quick with sharp move else we may see second bout of sell-off
  
• A health consolidation would prove the strength of the move
  
• A daily close below 19320 would see the Index drift towards 19030
  
• Need to remain vigilant as drag can be on both sides
  
• Expected to consolidate remain in the range of 19230-19730 and any close outside the range requires re-assessment of risk
  
• Apparently there appears two distinct fault lines-the lower one at 19320 an the top one at 19720. There are chances of 200 points move if either of this is breached on a daily closing basis.
  
• Daily close above 19770 required for further gains
  

#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.