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Nifty - Between Trading Range 17600 to 18600

By closing Friday closing, we have closed Weekly, Monthly as well as the last trading session of the year closing for the Nifty-50 Index for the year 2022. On a Closing basis, the NIFTY 50 Index has ended the year with a gain of 4.33%

Now the new year 2023 has started and we are going to start a fresh journey from 2nd Jan 2023.

What is expected from the market now?

We have seen a lot of negativity and volatile trends with geopolitical tensions, inflation, fear of recession, and a slew of rate hikes from the central banks across the world in the last year 2022.

In the last week of trading, the Nifty-50 Index continued to stay below the 18600 mark (as stated in our previous technical journal of Dec 23rd, 2023); however, they have been able to successfully defend the crucial supports on a closing basis of the level 17838, which we have suggested in our last technical journal.

Nifty - 50 Index Monthly Chart

The Nifty 50 Index monthly chart is suggesting that we have closed slightly below the level of November 2022 low level, which was 17959.20 and our December -2022 month closing happened on 18105.30, after touching the low level of 17774.25. On a monthly note though the index ended up losing 3.48% On a short-term basis this is a negative sign, which is suggesting, if we break down below this level, we can see more downfall in near future.

Nifty - 50 Index Weekly Chart

Interestingly weekly chart defended the shorter 20-Week MA and stays at 17858.

The previous to previous week's low was 17779.50 and we have witnessed that the market bounced back from the previous week's low, which was 17774.25.

This is showing the interest in buying in value stocks, which have lost their real value and corrected more than their actual strength.

Nifty - 50 Index Daily Chart

The daily candle is able to close itself well above the previous day's low., which is supporting that the near-term downfall is on a halt now.

But just remember that closing below 17770, will invite a fresh bout of selling

Outlook for the coming week starting from 2nd Jan 2023

Well, to be frank, the Nifty50 index has seen the formation of a Dark Cloud Cover kind of pattern on the daily chart, this is clearly indicating more fall if it fails to hold 18080,

But on the weekly chart, we have a bullish candle formation with taking support at the 17,770 level after falling for the previous three consecutive weeks, Which technically indicates some kind of a pause to recent correction and possible further value buying in coming trading sessions.

So, the zone of 17850-18000 is supposed to act as a strong support zone for the Nifty 50 Index.

Only a slippage below this point will make the markets incrementally weaker.

Volatility dropped: INDIAVIX came off by 8% to 14.87 levels again.

The markets are placed at a crucial juncture; keeping their head above 17850-18000 zones would be crucial to avoid weakness.

The coming week's resistance is likely to see levels of 18350 and 18500

And the coming week's supports will come in at 17900 and 17600 levels.

In summary, so long as the Nifty 50 Index stays above 18000 levels, there are possibilities of it staging and up move again. Only a violation of the 17850-18000 zone will invite weakness.

If you have witnessed closely, the Nifty -50 index had attempted a breakout by moving past the previous lifetime high point of 18604; however, after testing 18887 levels, the index not only retested the breakout point of 18600 but also significantly slipped below that level.

As of now, the attempted breakout has failed and NIFTY continues to face strong resistance at 18600 levels.

Best probable Trade of the Week:

Trade Bullish above 18265 for the target of 18500 and

Trade Bearish below 18000 for the target of 17600

So, the probability of the markets may largely stay stock-specific.

It is suggested to continue keeping leveraged exposures under control and overall exposures at modest levels.

A cautious approach is advised for the coming week.

Thanks for reading.

Keep Trading

Stay Invested


Neeraj Bhatia

(Managing Director)

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