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Nifty - Crossed & Closed above 17800, What Next?

Consecutive previous truncated trading weeks and FIIs buying helped the benchmark index to rise sharply from the last three previous weeks, as we mentioned in our previous technical journals.

The Nifty 50 weekly index continues to extend its gains for the third week in a row, with a little bit of over-extension on the chart. All four trading sessions in the previous week ended in gains; in fact. The NIFTY 50 index has closed with gains for nine sessions in a row with VIX staying at one of its lowest levels seen in the recent past. the benchmark index ended with a net gain of 228.85 points (+1.30%) on the weekly basis.

Technical chart Analysis:

Let us discuss, what the chart says:

Nifty 50 Index Daily Chart

The Nifty -50 Index Daily Charts are looking fantastic because Nifty has extended its gain from the last three previous weeks. But will it survive for next week? Because candles have already crossed 200 SMA and 50 SMA, and now they are ready to touch 100 SMA, which seems a little upside is left before they meet with resistance. We can not rule out the possibility that candles will try to break 100 SMA but closing above would seem difficult. 18100 and 18200 levels could be strong supply zone for an ultra-short-term period.

Nifty 50 Index Weekly Chart

We can dissect the Nifty 50 Index weekly chart into four types. Long Term, Medium Term, Short Term, and ultra short term.

Upward Channel shows that the Nifty 50 index is still bullish in Long Term & Medium Term, Downward channel shows that the benchmark index is bearish in short term, but a green candle closed above the channel showing an ultra short-term move, which is showing a bullish move. But only next week's candle closing formation will tell us if it is a real move or a fake breakout move

We should remember that the benchmark index is near the formation of a head and shoulder pattern. If this move is real, then we can see that upward movement is limited and restricted to nearly 18100-200 levels only.

The weekly chart is trading above all SMAs comfortably as of now, which shows that the benchmark index is approaching the psychological level of 18000 soon, but a retracement can not be ruled out before the up move begin again.

The pattern analysis of the weekly charts shows that the NIFTY has rebounded off the 100-Week Moving Average after a minor violation of that level. The 100-Week Moving Average presently stands at 17163. This point was followed by the 50-Week Moving Average which is placed at 17343 making 17300-17100 a very important support zone for the markets in the near term.

Nifty 50 Index Monthly Chart

After three red candles and a Doji candle formation, now candle of April month is becoming strong green, which has already closed above the height of the previous month's closing level, which is a strong sign, which shows, it can go further higher before monthly expiry.

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

FIIs buying has been one of the reasons for the rally in equity markets in previous weeks. The rally is to continue if the inflow continues in the coming trading sessions.

FIIs have been net buyers in cash all trading sessions in April month, to the tune of nearly Rs 5,000 crore, the highest buying since November 2022.

Also, FIIs have reduced their position in the Index Future segment, please have a look.

The coming week remains once again important; the INDIA VIX remains at one of the lowest levels seen in the recent past while it remained largely flat through the week.

The NIFTY-50 index has attempted to move out of the small falling channel that it has formed for itself; it has also raised the support levels higher in the process.

The Index has also crossed above the 20-Week Moving Average which stands at 17789 by closing a notch above that point.

The supports have been dragged higher at 17300 levels.

Support Level for the Coming Week for NIFTY:

As per technical charts, we can see the border support coming from the level of 17500 and it breaks decisively, then 17380 is the next support level to be watched.

Resistance Level for the Coming Week for NIFTY:

We can see the broader resistance level could be 18000, followed by 18180.

India VIX

INDIAVIX stands at 11.91 as of now.

This level remains one of the lowest levels seen in the recent past.

The markets stare at some imminent corrective retracement after unabated up-move; the low levels of INDIA VIX will continue to stay a concern for the immediate short term.

Any spike in the VIX will leave traders exposed and vulnerable to violent profit-taking bouts from the current levels.

From a technical standpoint, the markets remain due for some imminent corrective retracement; this makes any more upsides capped in nature.

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 post is only for learning purposes.

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