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Nifty -Directional biased Below 19250 or above 19482 Levels, if Range Consolidation breaks any side

Updated: Aug 21, 2023


Post Market Weekly Analysis


The Nifty 50 weekly Index opened at 19383.95, touched the high level of 19482.75, and slipped down to 19253.60 before closing at 19310.15. so the benchmark index oscillated in a range of 229 points over the previous five trading sessions, finally closing with a net loss of 118.15 points, i.e. in percentage term (-0.61%) on a weekly basis.


Let us see, what the technical charts suggest to us, for the coming week's trading range.


Today we will start out technical analysis of the Nifty 50 Index Daily Chart for some reason.


Nifty 50 Index Daily Chart -Mid-term to Long-Term Range

We are following this chart from October 2021 to till date. The Nifty was drifting down itself till Jun 2022 and was in the range of pink color channel. And then it starts its upward journey, crossover from 20th Jun 2022 till date. In between the Nifty 50 Index drift down again but took support at 16814 on 16th March 2023. At present Nifty Index is still in a bullish channel for a mid to long-term basis till it holds the range of 18500 to 18650 levels.


Nifty 50 Index Daily Chart

The Daily index candles have already broken the 9 Days Simple Moving Average and 20 Days Simple Moving Average and now taking support on 50 Days Simple Moving Average.


This is obviously not a good sign on a short-term basis, because the index is forming a lower high formation after touching the new all-time high levels, and is unable to cross the previous candle closing high after once touched the 19650 levels. Any candle formation close below 19253 will start drifting down the index to fill up the gap till 19181 immediately.


Nifty 50 - Index Daily Chart with Expanding Channel

As we all know that we are following the Nifty 50 Index Expanding Channel, for quite some days, and we can say that if it really sits in within the channel and slowly, it is trying to maintain itself above levels of 19250 levels.


We can not predict the lowest part of the channel, as of now, but if the speed of drifting down will be the same, then in the coming days, it can touch 18800 levels anytime in the future, which would be 100 days simple moving average.


Nifty 50 Index Weekly Chart

The closing below the 9-week simple moving average shows that in the short term, the bulls are losing grip on the Nifty 50 Index. The next mid-term support is only on 18800 levels, which is actually a 20-week simple moving average.


Nifty 50 Weekly Chart ( Newly Adjusted Fibonacci Chart Status)

In our previous technical journal, we suggested that 19300 levels are very important to hold and it defended, but as we can see that the maximum time the index hovered near its lower levels.


So we can say that now the level of 19250, is very important to hold within the coming week's trading range, else the next downward level of the Fibonacci series will be open for approach, which is visible at 18783 only. We can not say how much time it will take to reach there, but we can see the new range is already open now.


Nifty 50 Index Monthly Chart

The only positive point is that this week, the Nifty 50 Index can not able to break the previous month's low level, which was sitting at 19234.40. But the million-dollar question is, will it be able to defend in the coming weeks? We still have two expires left 24th August and 31st August 2023.


FII Weekly Activities:

Foreign institutional investors (FIIs) remained sellers in the fourth consecutive week as they offloaded equities worth Rs 3,379.31 crore, while domestic institutional investors (DIIs) compensate as they bought equities worth Rs 3,892.3 crore in this week.


In the truncated week, the equities were expected to spend the truncated with on a

tentative note. In line with this analysis and as expected, NIFTY exhibited cautious behavior as it traded in a very capped and limited range.


The markets did not take any directional bias; they just consolidated with a corrective undertone.


At present, FII data seems to be given a natural signal with a negative bias. Future Open Interest was increased and decreased in the last trading session. FII cash activity was also subdued


USDINR

The Indian rupee weakened past the 83 mark for the first time in ten months and went close to record low tracking losses in the global equities and currencies market. The domestic currency ended lower by 25 paise for the week at 83.10 on August 18 against its August 11 closing of 82.85.



Outlook for the NIFTY 50 Index for Coming Week starts from 21st August 2023


The Nifty 50 Index formed a Doji candle on the daily chart and a bearish pattern on the weekly Chart. Below 19,350 levels, weakness will continue to prevail and could be seen more downside below 19250.


A fresh sell-off could be seen only after the dismissal of the 50-day SMA or 19,250 level, below which the index could slip to 19200-19100 levels.


The Negative chart pattern of lower highs and lows is still intact and the index is currently on the way down to form a new lower low.


The index has consistently remained below its 20-day SMA, a sign that underscores the prevalence of a bearish trend.


The Nifty 50 Index has closed in the negative for the fourth consecutive week and the weekly momentum indicator has also triggered a negative crossover, indicating that weakness is setting in on a higher time frame. 19100 seems not too far from here to be touched soon.


India VIX


The previous week India VIX closed at 12.14 from 11.52. Within five trading sessions, it touched the high of 12.5, It rose on a closing basis by 5.38% on a weekly basis.


Support Level for the Coming Week for NIFTY:

The broader support level on the technical chart could be in the range of 19210 followed by the level of 19050.


Resistance Level for the Coming Week for NIFTY:

The broader resistance level on the technical chart could be 19500, followed by 19630.


Reading Current Option Data:


Options data suggests a broader trading range between 19000 to 19600 zones while an immediate trading range between 19100 to 19500 zones.


On the Call side, 19400 option strikes are standing as a big hurdle with having an Open interest of 2,34,797, where the change in OI happened on Friday, the last trading session is 1,30,343


Another side on Put Side, 19300 strikes are standing only with the highest number of Open Interests of 1,45,822, followed by 1,07,259, on 19250 option strikes.



Overall, in the coming week, we are likely to see some risk-off environment prevailing in the markets and at the same point in time, we will see low beta and defensive space doing well in the markets.


The corrective undercurrents may well persist for some more time.


It makes it important that fresh buying be kept limited to low beta stocks and the ones that have a strong and rising relative strength against the broader markets.


A cautious approach is advised for 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 suggesting here anyone follow my views. I do not have any WhatsApp Group ID or Telegram ID related to it.



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