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Nifty -After consolidation, breakout, and close above 19550, Now What Next?

Updated: Jul 18, 2023

After starting in a flat mode, the benchmark Nifty 50 Index oscillated in a narrow range for most of the week, but a strong close in the last trading session of the week i.e. on Friday, helped the index end higher. Consequently, the benchmark indices, the Nifty managed to gain over a percent to close at 19,564.50 points.

The Nifty 50 Index oscillated in a 268.25 points range in the past five sessions in the previous week., extending the move high, and the headline index closed with a net gain of 232.70 points (+1.20%)

Nifty 50 Index Monthly Chart

The Nifty 50 Index monthly chart does not show any tiredness and still moving upward journey toward new all-time new highs. All the moving averages favor the move so far. The Overall candles are enjoying a higher stay above the channel.

Nifty 50 Index Weekly Chart

The Weekly chart of the Nifty 50 Index sitting at its new all-time high levels. All moving averages are still in its favor, which indicates, the long-term bullish trend still continues.

Nifty 50 Weekly Chart (Fibonacci Chart Status)

As discussed in our previous technical journal, as per Fibonacci levels, the index can touch another new all-time new high, and it completed it successfully in the previous week. Now the next level 19741 is not so far from here. As per the Fibonacci series, the number is 1.272%, if the bullish rally continues.

Nifty 50 Index Daily Chart

The Nifty 50 Index Daily Chart has not looked back from the level of 16828, which it touched low on 20th March 2023. the Nifty has not retraced after crossing its previous all-time high. It continues moving along with higher highs and creating new all-time highs.

Nifty 50 Index Hourly Chart

In the hourly chart of the Nifty 50 Index, one can see that, in the last trading session of the previous week, it has already given a breakout, and now only need to wait for a one-day confirmation candle, to move to catch an next higher level

FII's Weekly Activities

From FII's activities, we can see that FIIs are continually buying quality stocks from the Indian stock market in a large chunk because their long-term outlook is still bullish for our country. Future data is showing a bullish trend.

Outlook for the NIFTY 50 Index for Coming Week starts from 17th Jul 2023

The overall technical structure of the markets remains buoyant and the market has not been given any opportunity to suggest based on which we can say that the markets may be staring at any major correction.

The only thing that one needs to stay cautious about is the low levels of VIX which leave the market exposed to profit-taking bouts from current and/or higher levels.

In the previous week a sharp surge in the IT pack was the key highlight on the sectoral front and metal, realty and pharma also posted decent gains, though underperformance of banking stocks capped the rally. Buying continued in the midcap and smallcap space with both the indices edging higher in the range of 1.25-1.85 percent.

The next week's highlights are:

  1. Corporate results for quarter-1 will take pace, and it seems a very good result quarter

  2. Progress of mansoon - It is a worrying signal so far, about flood fury. This has led to flash floods, landslides, and fatalities

  3. High Inflation in consumer products

  4. FII's continuous Inflows

  5. US Dollar Strengthened and OIL prices slips more than a dollar on Friday trades.

  6. Positive Mood in the Global Market

Reading Current Option Data:

The maximum weekly Call open interest is at 20,000 option strikes, followed by 19,600 and 19,700 option strikes, with Call writing at 19,800 strikes, then 20,100 and 19,700 option strikes.

On the Put side, the maximum open interest is at 19,500 strikes, followed by 19,400 and 19,300 option strikes, with Put writing at 19,400 strikes, then 19,500 and 18,900 option strikes.

Option data clearly indicated that 20,000 can be a possibility for the Nifty in the coming weeks, but in the near term, 19,600-19,700 can act as a resistance area, while 19,500-19,300 is expected to be a support area.

India VIX

The previous week India VIX closed at 11.23 from 10.38, It came off by 7.37%

Support Level for the Coming Week for NIFTY:

The broader support level on the technical chart could be in the range of 19310 followed by the level of 19200.

Resistance Level for the Coming Week for NIFTY:

The broader resistance level on the technical chart could be 19700 followed by the levels of 19865

Even if the markets slip under any consolidation, the recent price action has dragged the supports higher to the 19000-19200 zone.

So long as the NIFTY is above this zone, the trend would stay intact.

We are likely to see sectors like IT, select midcaps, Energy, Metal, and Pharma do well.

It is recommended to not only keep fresh purchases selective but also guard the profits vigilantly at higher levels.

Thanks for reading.

Keep Trading

Stay Invested


Neeraj Bhatia

(Managing Director)

Disclaimer: I am not a SEBI Registered technical Analyst, so consult your financial advisor, before taking any trade. This technical weekly Journal post is only for learning purposes and its a free of charge. The views written here are completely my personal view only. I am not suggesting here anyone follow my views. I do not have any WhatsApp Group ID or Telegram ID related to it.

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