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Nifty - Entered in Wide Consolidation Range;

As we suggested earlier, if the level of 21658 breaks on the closing basis, only then Index will see a downward fall. Fortunately, it did not happen, and we have seen the choppy sessions. Now in the coming week, we anticipated to see the market in a consolidation phase because the market is not able to break up its resistance levels, and as well as the market is buying from its support levels, which means the market is not going anywhere and has entered a consolidation range mode, till it breaks either side.


Post Market Weekly Analysis


The Nifty 50 weekly Index opened at 21921 touched the high level of 22053 and slipped down to 21629 before closing at 21782.5. So the benchmark index oscillated in a range of 423 points over the previous week's trading sessions, finally closing with a loss of 71.30 points, i.e. in percentage term (-0.33%) on a week-on-week basis.


Nifty 50 Index Monthly Chart


In the previous month, the market ended with in dozi candle, which is an indecisive candle. Now so far within six trading sessions of the month, the market is not able to break up or break down either side. Despite now, it is getting rejected from the high level. So it is too early to say anything, but we need to watch the level of 21629 for a bearish trend, and if it breaks then we can touch the level of 21137 immediately.


Nifty 50 Index Weekly Chart



By observing the weekly chart we can see that the weekly candle is resting on the 9-week-SMA, and the candle gets buying support from the lowest level. If the level of 21629 breaks decisively, then we can see the fall of the level of 21500 and 21400, but if the market can maintain itself above it, then we can see the defined range consolidation in the coming week.


Nifty 50 Index Daily Chart


On the daily chart, the market is looking weak. because it is sitting below between 9-Day-SMA and 20-Day-SMA, which indicates, that if the market breaks down the level of 21629, then the market will go down till 50-DAY-SMA, which stands at the level of 21442 as of now.


Nifty 50 Weekly Fibonacci Chart Status


As suggested previous week, we were expecting consolidation, and it happened. Now for the coming week again we are expecting consolidation between 0.236 to 1.00 levels. We could not see any trendy market in the coming week either side.


Nifty 50 Index Weekly Chart -with Technical Indicators


RSI Indicator Pattern

The weekly RSI stands at 68.94; it stays neutral and does not show any divergence

against the price.


MoneyFlow Indicator

This weekly indicator is at 83.11 which is its overbought zone. And it seems that it is looking for a bearishness in the market from this level.


MACD Indicator Pattern

The weekly MACD is bullish and stays above the signal line. But the narrowing Histogram hints at a deceleration of momentum is also observed as well.


FII's & DIIs Cash Monthly Activities


Foreign institutional investors (FIIs) sold equities worth Rs 5,871.45 crore in the week gone by, while domestic institutional investors (DIIs) have provided support by buying equities worth Rs 5,325.76 crore.


The main reason for FII selling is rising bond yields in the US. In the last fortnight of January, FPIs were massive sellers in financials. FPIs were buyers in IT and telecom, which explains the resilience of the leading players in these segments.


Previous Week's FII positions in Options & futures and Cash Segment


Outlook for the NIFTY 50 Index for the Coming Week


Nifty and other Indian market indices ended lower for the week ended February 10th, 2024 amid high volatility as the US Fed and RBI diminished hopes of early rate cuts.


Going ahead, the last leg of Q3 FY24 earnings, and January inflation numbers of India and the US could keep markets volatile.


Caution prevails in the market ahead of the release of US, UK, and Indian inflation data next week, while the US 10-year yield is inching higher.


India VIX:

The previous week India VIX closed at 14.69. it touched a high of 16.33 and a low level of 14.69, It gained on a closing basis by +0.7500 (+5.10%) on a week-on-week basis.


The India VIX, the fear index, remained on the higher side for the fifth consecutive week indicating the possibility of higher volatility in the coming days.


Support Level for the Coming Week for NIFTY:

The broader support level on the technical chart could be in the range of 21629 followed by 21429 and 21137 levels.


Resistance Level for the Coming Week for NIFTY:

The broader resistance level on the technical chart could be the range of 21900-22053, followed by 22126 levels.


Crude Oil


Oil prices settled higher by about 6 percent for the week amid mounting worries about supply from the Middle East. 


Brent crude futures settled at $82.19 a barrel. U.S. West Texas Intermediate crude futures settled at $76.84 a barrel.


As India's oil import dependency is over 80 percent, rising crude prices are a worry for the nation.


Important Upcoming Weekly Activities


India Inflation

The Ministry of Statistics and Programme Implementation will announce Consumer Food Price Index (CPI) numbers for January on February 12. India's retail inflation likely eased to a three-month low of 5.09 percent in the month.


The Reserve Bank of India in its monetary policy committee meeting held last week maintained its 5.4 percent inflation projection for FY24. The central bank governor, Shaktikanta Das highlighted that headline inflation moderated to an average of 5.5 percent during April to December 2023, from 6.7 percent during the whole of 2022.


US inflation

U.S. Bureau of Labor Statistics’ revised inflation figures for 2023 will be released on February 12. It aims to reflect how prices behaved over the year more accurately than the monthly announcements.


This is something the Fed is watching, and Governor Waller explicitly mentioned these revisions in his speech last month, so it’ll be an important one for the timing of any rate cuts.


U.S. inflation data for January will also come on February 13. Economists expect the overall CPI reading to come in at 2.9 percent on an annual basis in January, down from 3.4 percent in December 2023.



Technical Analysis


For the Nifty 50 Index, the next support is at 21,650 and a breach of it can lead to a correction towards 21,400. On the upside, key hurdles are placed at 22,000-22,100..

For Bank Nifty, the 50-day Simple Moving Average (SMA) stands as a robust resistance point at 46,300 and the crucial support of the 200-day Moving Average (DMA) is situated at 44,800. A breach below these levels could potentially test the 44,000 level in the upcoming trading session.


Reading Current Option Data


Options data indicated that 22,000 is expected to be a key hurdle for the Nifty 50 Index on the higher side, with key support at 21,500 as decisive breaking on either side of this range can decide the next course of action. Till then, the index is likely to remain in this range.


As per the weekly options data, the maximum Call open interest was seen at 22,000 strikes, followed by 23,000 strikes, and 22,700 strikes, with meaningful Call writing at 22,700 strikes, then 22,500 and 22,200 strikes.


On the Put front, 21,500 strikes owned the maximum open interest, followed by 21,000 & 20,500 strikes, with writing at 21,500 strikes, then 20,500 and 21,700 strikes.



Participant Wise Final F&O Weekly Summary


FII's, PRO, and Clients F&O Summary by Segment


1). FII's positions as of the last trading day:



2). PRO's positions as of the last trading day:



3). CLIENT's position as of the last trading day:



Summary - Overall


Currently, the Nifty 50 Index is seen consolidating and some minor retracements cannot be ruled out. A sustainable upmove will take place only after the Nifty 50 Index manages to cross above the 22100-22200 zone.


We expect that the coming week will continue to be at a possible consolidation or a minor retracement in the Nifty 50 Index. However, we can see Nifty Bank, one of the key sector indices, bettering its relative strength.


Along with Nifty Bank, we can expect resilient performance from defensive pockets like IT, Pharma, FMCG, etc.


It is strongly advised to avoid large leveraged positions.


While adopting a highly selective approach, vigilant protection of profits is also advised at higher levels.


Thanks for reading.

Keep Trading

Stay Invested


Regards,

Neeraj Bhatia

(Managing Director)    


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 forcing anyone to follow my thoughts. I do not have any WhatsApp Group ID or Telegram ID related to it.


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