After creating an all-time life high on the level of 22126.80, on 2nd Feb-2024, the first time the benchmark indices the Nifty 50 Index, created an all-time life high every day in all 5 previous trading sessions.
The ALL-TIME HIGH's on Last Week's Trading Sessions:
Monday -22186.65,
Tuesday - 22215.60,
Wednesday - 22249.40,
Thursday -22252.50 and
Friday - 22297.50
Along with the Nifty 50 index formed higher highs and higher lows in all weeks in the Feb Series.
Week 1 - High of 22053.30
Week 2 - High of -22068.65
Week 3 - High of 22297.50
Post Market Weekly Analysis
The Nifty 50 weekly Index opened at 22103.45Â touched the high level of 22297.50 and slipped down to 21875.25Â before closing at 22212.70. So the benchmark index oscillated in a range of 422.25 points over the previous week's trading sessions, finally closing with a gain of 172 points, i.e. in percentage term (+0.78%) on a week-on-week basis.
Nifty 50 Index Monthly Chart
After the formation of the Dozi candle in the previous month's chart, the Feb month's candle comes up with strong sentiment and is now ready to close above the highest level of the previous month's higher levels. All the SMA's are supporting and still, the volumes are decent.
Nifty 50 Index Weekly Chart
On the weekly chart, the index formed a small bullish candle with shadows on either side, indicating indecisiveness among participants regarding the direction.
The weekly candle got rejected from the 9Week SMA and made again a new high. this week if the level of 22300, then we can see the new level of an all-time high and can go up to 22500 the next target, else we will see a wide range consolidation in the market for the upcoming week.
Nifty 50 Index Daily Chart
The daily chart shows that even though the market has made higher highs, even the profit-taking bouts are already in place on higher levels. This week also we can see the profit taking on higher levels if the market tries to move forward.
Nifty 50 Weekly Fibonacci Chart Status
Going forward 1.272 level would be critical. We can see profit booking at higher levels, and it can be within the range of 0.618 and 1.272
Nifty 50 Index Weekly Chart -with Technical Indicators
RSI Indicator Pattern
The weekly RSI stands at 72.59; it stays mildly overbought. The RSI remains neutral and does not show any divergence against the price. The weekly strength indicator RSI is above its respective reference lines, signaling a positive bias.
MoneyFlow Indicator
This weekly indicator is at 84.27 which is in its overbought zone. And it seems that it is looking for profit-taking bouts in the market from this level or a little higher levels.
MACD Indicator Pattern
The weekly MACD is bullish and stays above the signal line. The Histogram is narrowing which suggests the momentum in the upmove may be decelerating.
FII's & DIIs Cash Monthly Activities
In addition to all the above data points, institutional flow will also be an important factor to watch and within that, domestic institutional investors remain dominant players in boosting equity markets to historic highs despite foreign institutional investors outflow.
FIIs remained net sellers for the last week to the tune of Rs 1,939 crore given the US bond yields at elevated levels, though the outflow slowed down compared to the previous week (at Rs 6,238 crore). Their total net outflow for the current month stood at Rs 15,857 crore in the cash segment.
However, DIIs have net bought Rs 3,533 crore for the week gone by, in addition to Rs 8,732 crore of buying in the previous week, taking the total inflow close to Rs 21,000 crore for February.
The 10-year US treasury yield closed at 4.25 percent on Friday against 4.28 percent on a week-on-week basis.
Outlook for the NIFTY 50 Index for the Coming Week
The market extended its upward journey for yet another week ended on February 24 with the Nifty hitting a historic high with above-average volumes despite FII outflow, though it was a volatile week. Positive global cues post Nvidia Corporation's earnings, stable oil prices, and the rally in most sectors (barring technology, PSU, and select energy counters) boosted the market sentiment.
Hence, overall, the bulls are likely to maintain their stronghold over the market though there may be volatility and consolidation due to the monthly expiry of February futures & options contracts scheduled on February 29, with a focus on quarterly GDP numbers by India & US, monthly global manufacturing PMI data, and auto sales, in the coming week starting from February 26.
Next week market might take a pause ahead of various global economic data releases. US would be reporting its Q4 GDP numbers along with the initial jobless claim, PCE data, and consumer confidence for February.
Besides this, factors such as the movement of the dollar index, US bond yields, and crude oil prices will also influence market dynamics, However, the overall trend remains positive, we believe.
India VIX:
The previous week India VIX closed at 14.97. it touched a high of 15.22 and a low level of 13.70, It lost on a closing basis by -0.2250 (-1.48%) on a week-on-week basis.
Meanwhile, the volatility cooled down further in the week and failed to sustain above the 200-week EMA (placed at around the 16 levels), giving some comfort to bulls.
Support Level for the Coming Week for NIFTY:
The broader support level on the technical chart could be 22000, followed by 21800 levels.
Resistance Level for the Coming Week for NIFTY:
The broader resistance level on the technical chart could be the level of 22300, followed by 22470 levels.
Crude Oil
The Brent crude futures, the international benchmark for oil prices, tested the resistance at the downward-sloping resistance trendline but failed to close above the same.
Overall, the prices continued to consolidate for a fifth consecutive week with a hurdle on the higher side at around $84 a barrel as experts feel decisively closing above the same can drive a further rally in oil prices.
Brent crude futures closed at $80.8 a barrel, down 3.2 percent during the week.
Important Upcoming Weekly Activities
Q3FY24 GDP
On the domestic front, the market participants will monitor the quarterly GDP numbers for the quarter ended December 2023 due on February 29.
The general expectation is that the numbers to be lower than the 7.6 percent growth recorded in the previous quarter with support from the manufacturing space, but much higher than the 4.5 percent growth reported in the year-ago period.
The headline growth at 6.7 percent YoY for Q3FY24 compared to the previous quarter, value added in manufacturing was likely aided by an improvement in profit margins, while growth in most other sectors decelerated. Domestic demand continues to drive GDP, but early signs of recovery in external demand likely supported net exports
Meanwhile, the second estimate for full-year (FY24) economic growth numbers will also be released on the same day, i.e. February 29. As per the preliminary estimates, the growth is estimated at 7.3 percent for the current financial year, against 7.2 percent in the previous year.
Domestic Economic Data
Further, the fiscal deficit and infrastructure output data for January, too, will be announced on February 29 (post-market hours). Apart from this, all eyes will also be on the HSBC Manufacturing PMI (final) numbers for February scheduled on March 1. In January, the PMI hit a four-month high at 56.5, recovering from an 18-month low of 54.9 level in the previous month, which experts feel may remain better in February too.
Foreign exchange reserves for the week ended February 23 will also be released on March 1.
Auto Sales
The focus in the coming week will also be on the auto sales data for February, which will be announced at the beginning of next month. Hence, auto stocks like Maruti Suzuki, Mahindra & Mahindra, Ashok Leyland, Tata Motors, TVS Motor Company, Bajaj Auto, Hero MotoCorp, Eicher Motors, Escorts etc will be in focus.
The Nifty Auto index has been in an uptrend for a fourth consecutive month, rising more than 7 percent so far in February, beating the benchmark Nifty 50 which gained 2.2 percent in the current month.
US GDP
Globally all eyes will be on the US economic growth numbers for the fourth quarter ended December 2023. The second estimate for the said quarter will be released on February 28. As per the advance estimates published in January, the economy grew 3.3 percent in Q4-CY23, against 4.9 percent growth in the previous quarter.
Global Economic Data
Apart from GDP numbers, the participants will also focus on the US new home sales, durable goods orders, personal income & spending, and pending home sales data for January in the coming week, while Japan will release its inflation numbers, retail sales, and the unemployment rate for January, during the week ahead.
Further, globally, Manufacturing PMI (final) data for countries will be released on March 1.
Technical Analysis
Technically, the Nifty 50 Index seems to be on a northward trajectory despite intermittent consolidation and minor corrections.
As long as the index holds 21,900 (which coincides with the 21-day exponential moving average-EMA), the uptrend is likely to continue in the coming sessions with the next hurdle on the higher side at the 22,400 level, followed by the 22,500 mark.
In the short term, the index can move towards 22,400 and a move above it can take it to 22,700. Support on the lower end is placed at 21,900, while strong support is anticipated in the range of 21,600-21,550.
Both price and momentum indicators suggest a continuation of the positive price action.
The chart pattern suggests that if Nifty crosses and sustains above the 22300 level, it would witness buying, leading the index towards 22500-22600 levels.
However, if the index breaks below the 22100 level, it would witness selling, taking the index towards 22000-21800 levels.
For the week, we expect Nifty to trade in the range of 22600-21800 with a positive bias.
Reading Current Option Data
Options data indicated that the Nifty 50 may face the next resistance at the 22,500 level, with support at the 22,000 mark.
On the Call side, the maximum open interest was seen at 23,000 strikes, followed by 22,500 strikes & 22,300 strikes, with writing at 23,100 strikes, then 22,300 & 22,500 strikes,
On the Put side, 21,000 strikes owned the maximum open interest, followed by 22,000 and 21,500 strikes, with writing at 21,200 strikes, then 22,200 & 22,300 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
Presently, the Nifty 50 index is consolidating at higher levels while it keeps marking
incremental highs. In the process, the support for Nifty has been dragged higher
to 21700 levels. Any corrective moves are expected to find support. The range or oscillation has gotten wider than usual; this suggests that while the Index may continue marking incremental highs, it may take some time before it makes any runaway upmove.
Overall, while the undercurrent remains buoyant and intact, there are higher possibilities of the Nifty continuing to consolidate at higher levels. It is time that one gets highly stock-specific in the approach.
Also, with any incremental moves higher, emphasis should be placed on protecting profits at higher levels. Fresh purchases should be made while staying highly selective. Volatility is expected to rise from its current levels. A cautious and mindful approach is advised for the coming week.
Thanks for reading.
Keep Trading
Stay Invested
Regards,
Neeraj Bhatia
(Managing Director)Â Â Â Â
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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