NIFTY-Weekly Outlook-Venkat's Blog

After 4 consecutive weeks of gains, the Index seems to have hit the wall. In the past week and the previous week it made the high of 22525 and could not cross the hurdle. Bulls attempted good attempts to take it higher. However, the Bears waiting on the sidelines for long loaded with all ammunitions stepped up their attack, this resulted in a sharp fall and the Index ended with a large bearish candle. The balance is tilting towards negative sentiments. The narrower range in the previous two weeks proved to be a sign of exhaustion. Will there be sharp recovery or a continuation of the fall?

A few observations from the weekly charts are:

• The index moved in a range of 620 points viz. between 22525 and 21905
  
• The oscillators of different time frames are stretched and showing mixed signals
  
• Option open interest to drive the direction of the market
  

Expected scenarios for the ensuing week

• Volatility and choppy moves likely to continue till the end of this month
  
• Index staying breaching the 22240 with ease is a negative sign and the only saving grace is that 21900-930 seem to provide interim support
  
• Additional interesting observations
  
• Index posted a strongly bearish bullish candle erasing most of the gains made in the past 3 weeks
  
• Index may find supports at 21930, 21820, 21770 and the index could face resistances at, 22130, 22240,,22425
  
• 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 21876 and the 200 DMA at 20242
  
• The weekly charts suggest that the Index has breached the ascending channel at 22050. The ensuing week will provide confirmation of whether it is a real breach of a false one. If real then the target could be 21200
  
• The notable observation is that the Index has formed a tweezer top at 22525 negating the expected bull story towards 22770. However, the daily charts show interim support one as 21900-930 withstood three consecutive sessions. At the same time we see a death cross on the daily charts making a case for a move towards 21540
  
• Most likely scenario would be a consolidation between 22770 & 22350. Breach on either side requires reassessment of risk
  
• The market is expected to remain volatile and witness choppy moves. This requires cautious approach
  
• In the past few years the March month has produced strong moves which are mostly in the direction of the trend. It remains to be seen how the scenario unfolds
  
• As highlighted in the past few weeks the Index has achieved the target of 22450+
  
• Upside potential seems limited until we see a daily close above 22240
  
• Ensuing week is crucial for deciding the future direction and the target
  

#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.