Post Market Weekly Analysis
The Nifty 50 weekly Index opened at 19539.45 touched the high level of 19843.30 and slipped down to 19480.50 before closing at 19751.05. So the benchmark index oscillated in a range of 362.80 points over the previous five trading sessions, finally closing with a marginal gain of 97.55 points, i.e. in percentage term (0.50%) on a weekly basis.
Nifty 50 Index Monthly Chart
The Index monthly chart is comfortably trading above the previous week's low levels, this means that if the level of 19332 is secured, no big bearish scenario will occur soon. Even if it is too early to predict any level for the month, and the month is still going on having a big event follows that is corporate earnings, which can boost the sentiments for a while.
Nifty 50 Index Weekly Chart
The weekly chart tells us the market is taking support at 20Week MA which is sitting at 19387, if it is defended in the event of corporate earnings, the market can go into wide consolidation mode.
Nifty 50 Weekly Fibonacci Chart Status
As we suggested in our previous technical journal, the market can move within the range of 0.5 to 0.38 levels, but the market moved a little wider range and traveled within the range of 0.236 to 0.618, and got rejected from high levels before closing. We expect the market to be consolidated in the coming week, so it is not likely that the market will break the previous week's range.
Nifty 50 Index Daily Chart
The positive chart pattern like higher tops and bottoms is intact as per the daily chart of the Nifty Index and the last trading session i.e. Friday's swing low of 19635 could be considered as a new higher bottom of the sequence.
The short-term trend of Nifty continues to be positive. A decisive move above the hurdle of 19800-19850 levels will likely bring another round of sharp upside momentum in the near term if the Immediate support of 19630 is saved in the coming week's trading sessions.
Nifty 50 Index Hourly Chart
The daily and hourly momentum indicators provide divergent signals and in such a scenario a consolidation appears with high probability. In the daily chart the index is taking support on 20 SMA, and in the hourly chart, the Index is restricting by 20 SMA.
Nifty 50 Index Weekly Chart -with Technical Indicators
RSI Indicator Pattern
The weekly RSI is 62.33; it stays neutral and does not show any divergence
against the price.
This weekly indicator is at 54.37, which indicates once again still neutral biased. The big money is not chasing and there is a higher chance of a consolidation week.
MACD Indicator Pattern
The weekly MACD is bearish and trades below its signal line. A bullish engulfing candle has emerged; however, it is of little significance as it has emerged with an overall uptrend after just a minor decline.
FII's Cash Weekly Activities
The US bond yields continued on the rising trend, which impacted the FII flow as they remained net sellers in India for the third consecutive month.
We are expecting that the selling may reduce in the coming days but in case the oil prices surge due to the Israel-Hamas war, then further selling can't be ruled out.
It is expected that, If the Israel-Hamas conflict widens and crude shoots up, FIIs might continue to sell.
The level of uncertainty is high so far at this time.
FII's Future Open Interest has again reached a high point, at 81.1K, where 10.4K shorts were made only on Friday, the last trading session of the previous week.
FII's Cash Monthly Activities
FIIs net sold Rs 2200 crore worth of shares in the cash segment last week, taking the total current month outflow to Rs 10600 crore, though DIIs managed to offset to a large extent by buying nearly Rs 8400 crore worth of shares during the month.
Outlook for the NIFTY 50 Index for Coming Week
In the previous to the previous week, the Nifty Index had tested the 20-week MA at the level of 19333.60 and had taken support by rebounding from that point.
The 20-week MA which currently stays at 19387 remains an important support for the markets on a closing basis.
The markets will consolidate so long as they keep their head above 19387 levels. Any violation of this level will make the markets incrementally weaker.
The previous week India VIX closed at 10.61 from 10.30 Within five trading sessions, it touched a high of 11.63 and a low level of 10.12, It gained on a closing basis by
0. 3175 (3.08%) on a weekly basis.
The volatility gauge, India VIX, showed a marginal increase of 3.08% to 10.61 on a weekly basis. It remains within a striking distance of 10.14, the lowest level seen on this indicator so far. This remains a point of concern as this keeps the markets exposed to profit-taking bouts.
Support Level for the Coming Week for NIFTY:
The broader support level on the technical chart could be in the range of 19500 followed by the level of 19380. levels.
Resistance Level for the Coming Week for NIFTY:
The broader resistance level on the technical chart could be 19880, followed by 19950 levels.
The Israel-Hamas conflict is one of the key reasons behind the spike in oil prices in the passing week as the war raised concerns that the escalation may impact the oil production in the Middle East (which accounted for around one-third of global seaborne trade) and hit supplies, though the physical oil supply has not affected yet.
In addition, the news of the US tightening its sanctions program against Russian crude exports due to the violation of the G-7 oil price cap also fuelled the rally in oil prices. Experts expect the volatility in oil prices to continue amid geopolitical tensions and so far do not expect direct involvement of other nations of the Middle East (especially Iran) in the war.
Brent crude futures, the international benchmark for oil prices, rallied 7.5 percent to $90.89 a barrel during the week, technically forming a Bullish Harami kind of pattern on the weekly scale, which is a bullish reversal pattern.
Hence, we should keep a close eye on the rally if any, as any spike in prices is a major worry for oil importers like India.
Nifty on Friday ended formed a long bull candle with an upper shadow on the daily chart.
The positive chart pattern like higher tops and bottoms is intact as per the daily chart and Friday's swing low of 19635 could be considered as a new higher bottom of the sequence.
The short-term trend of Nifty continues to be positive. A decisive move above the hurdle of 19800-19850 levels will likely bring another round of sharp upside momentum in the near term. Immediate support is placed at 19630
On the Nity 50 Index Daily chart, one can observe that the zone of 19640 – 19620, where support in the form of the 40-day average was placed, acted as a cushion and prevented further decline.
The technical analysis of the weekly charts shows that the markets are unlikely to see any runaway move on the bullish side, any extension of the move on the higher side will find resistance to the upward-rising trend line which begins from 18900 and joins subsequent higher tops.
On the lower side, the NIFTY has important support at 20-week MA currently placed at 19387. So long as this is protected, the index will consolidate in a defined range and shall get incrementally weaker if this important support level is violated on a closing basis.
Reading Current Option Data
The Options data also indicated that 19500 can be the support area in the coming days with resistance at 19800-19900 levels, but between 19700 is expected to be crucial for a move towards either side of support-resistance levels.
As per the weekly Options data, the maximum Call open interest was seen at 19800 strikes level, followed by 19900 & 20000 strikes level, with Call writing at strikes level strikes, then 19900 & 19800 strikes,
The maximum Put open interest was at 19700 strikes, followed by 19000 & 19600 strikes, with Put writing at 19700 strikes, then 19600 & 19500 strikes.
Important Upcoming Weekly Activities
Overall, it is the time when we get cautious about the markets.
Even if the up move gets extended over the coming days, it would be prudent to use such moves on the upside to vigilantly protect profits at higher levels.
Fresh purchases should be kept highly selective and within defensive and low-beta pockets. While keeping overall exposures at modest levels, a cautious outlook is advised over the coming week.
Thanks for reading. Keep Trading Stay Invested Regards, Neeraj Bhatia (Managing Director) https://www.crbpvl.com/
Disclaimer: I am a National Stock Exchange-certified Technical Analyst and Chartist but not a SEBI-registered analyst, so consult your financial advisor before taking any trade. This technical weekly post-market journal is only for learning purposes and it is downloadable free of cost. The views written here are entirely only my personal views. I am not forcing anyone to follow my thoughts. I do not have any WhatsApp Group ID or Telegram ID related to it.