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Nifty 50 - 16800 saved again...Now what?

Previous Weeks Key Points:

  1. Closed above 17000

  2. Defended again and maintained support above 16850

  3. VIX dropped a bit to 18.25

  4. Global Market Bounceback from Technical Support

Nifty 50 Monthly Chart

The nifty 50 monthly chart is still not showing any specific momentum to go upward overnight. It is still hovering below the previous month's close, which is a sign of weakness. But as we can see we still have 8 more trading sessions this month, we will wait for the confirmation that if Nifty 50 is matching up the previous month's close level or is ready to close below that point, which will confirm the weakness in the market for coming months Nov and Dec -2022.

Nifty 50 Weekly Chart

The nifty 50 Weekly charts is showing that even it is successful in taking support at or above SMA 50. It is at least a relief for traders because the result season is already started and the quarterly result can support the market to consolidate in the range of 16800 and 17100.

Nifty 50 Daily chart

On Friday, Nifty 50 shows even Friday DIIs try to overbuy whatever was sold by FIIs, even though Nifty 50 closed with a big red candle, which shows weakness in the short term.

One can see that whenever the Nifty 50 tries to go up, FIIs are trying to cash the opportunity and sell on rising in the cash market. this week only Monday and Friday, DIIs tried to support the market against FIIs selling.

Outlook for Coming Week starting from 17th October-22

Well, we can see that the best part is India VIX (Volatility) decreased a bit; INDIAVIX came off by 2.95% to 18.25.

The coming week is likely to see the levels of 17300 and 17480 acting strong resistance.

The supports are likely to come in at 17000 and 16840 levels.

A close examination of the weekly and daily charts shows that the markets have created multiple support zones for themselves.

On the daily chart, the index has defended the important support level of 200-DMA which is placed at 16987.

This level is very close to the 20-Period Weekly Moving Average which is at 16895.

The 50-Week Moving Average is presently at 17074.

All this collectively makes the zone of 16900 to 17100 a crucial support zone for the NIFTY.

So long as the Index can keep its head above 16900, there are better chances of the markets gathering strength through some consolidation.

Any slip below 16900 on a closing basis would invite incremental weakness in the markets.

It is strongly recommended that so long as the markets are consolidating, all new purchases must be kept limited to defensive pockets or in the stocks that are seeing improvement in their relative strength.

A cautiously positive approach is advised for the coming days.

Thanks for reading

Happy Trading

Keep Investing

Best Regards,

Neeraj Bhatia

Managing Director

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