Post Market Weekly Analysis
The Nifty 50 weekly Index opened at 19345.85 touched the high level of 19464.40 and slipped down to 19309.70 before closing at 19425.35. So the benchmark index oscillated in a range of 154.70 points over the previous week's trading sessions, finally closing with a gain of 194.75 points, i.e. in percentage term (1.01%) on a weekly basis.
Nifty 50 Index Monthly Chart
In the month of November, we can see that the monthly chart respects the lower levels of 18940 and closed above 19425 levels, which shows this month has not been bearish till now. The selling by FIIs especially in stocks in stocks is being absorbed by DIIs, which is indirectly connected with the retail customers through monthly SIPs.
Nifty 50 Index Weekly Chart
The weekly chart indicates the weekly candles are showing strength so far, but the candles are still not able to surpass the 20-week Moving Average, which is a concern, and if it could not be broken decisively, then it can become resistence further.
Nifty 50 Weekly Fibonacci Chart Status
The Fibonacci chart also indicates the same thought process. The level of 0.236 which is the level of 19610 is achievable, only if it breaks out decisively the 20-week-moving average, which is established at 19520.
Nifty 50 Index Daily Chart
The daily chart is again reprising the same that the market needs to break out a 20-week-moving Average and then it can beyond the 19600 to 19800 range also. The volume support is adequate to break it on the upper side, but it should be with price volume action.
Above the closing levels above 19463, we can see a sharp short covering on a daily basis, which will be quick. And if the market gets a rejection from this level on a closing basis, we can see consolidation with a slight bullish bias only.
FII's Cash Weekly Activities
FII's are continuously increasing their short position and the rough estimate is that they are short in their option position with an average if 19432 levels. If the market gives a breakout, their loss will increase and they can cover their short position. In that case, they will try to bring the market down to their levels. In case of Gap up opening and sustain, this will be a nightmare for them and will be a great day for bulls, due to their short position will be covered. but remember that FII's stop loss levels can be as big as 300 to 400 points. Keep it in mind, while trading.
FII's Cash Monthly Activities
This week, the market participants will keep a close watch on the decisions and actions of foreign institutional investors (FIIs) as they remained net sellers in the month of November, keeping up the outflow for the fourth straight month, though the intensity of selling has reduced from the previous months.
The FIIs have net sold more than Rs. 6100 crore worth of shares in the cash segment, but domestic institutional investors have managed to compensate it by buying shares worth more than Rs 6000 crore so far this month.
The US 10-year treasury yield dropped to 4.64 percent on November 10, from 4.93 percent on October 31, while the US dollar index slipped from 106.66 to 105.80 during the same period.
The movement in the Indian rupee will also be watched as the currency hit a record low of 83.47 a dollar last Friday before closing the week at 83.29, weakening from 83.12 last week.
Outlook for the NIFTY 50 Index for the Coming Week
In his speech last Thursday, Fed chair Jerome Powell stated that the FOMC was committed to bringing down inflation to the 2 percent target level.
The previous week India VIX closed at 11.10 from 10.88 Within five trading sessions, it touched a high of 12.17 and a low level of 9.80, It gained on a closing basis by
0.2250 (2.07%) 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 19220 followed by the level of 19030 levels.
Resistance Level for the Coming Week for NIFTY:
The broader resistance level on the technical chart could be 19550, followed by 19670 levels.
Brent crude oil futures have fallen sharply since mid-October to below $80 a barrel, which coincides with the 200-day EMA (exponential moving average), from around $92 a barrel on slowing demand and experts expect the prices to slide further.
This played a crucial role in the equity rally seen over the last couple of weeks. This also reduced the fiscal deficit worries and provided support to corporate earnings. On a week-on-week basis, Brent futures fell 4 percent to settle at $81.43 a barrel.
Technically, the Nifty50 is likely to get strong support at 19300 in the near term and face a lot of resistance at 19450-19500 levels. Hence, if the index surpasses the hurdle of 19500, then 19600-19700 can be the possibility in coming sessions, given the sentiment has remained positive for the last couple of weeks with higher lows for yet another week,
The index closed above the 21-week EMA (19,300), and formed a bullish candlestick pattern for the second consecutive week.
We can observe that the Nifty has held on to the support zone of 19310 – 19270 which coincided with the gap area and the 40-hour moving average. Buying interest emerged from that zone indicating that unless that is breached on the downside, we can expect the momentum to continue.
The hourly momentum indicator has triggered a positive crossover from the equilibrium line indicating that the consolidation has matured, and it has started a new cycle on the upside.
A decisive close above 19500 shall lead to a further extension till 19690. Broad market outperformance is likely to continue.
Reading Current Option Data
Options data also suggested 19500 as the crucial resistance area, with support at 19300 level
On the Call side, the maximum Call open interest was seen at 19500 option strikes, followed by 19400 and 20000 strikes, with meaningful Call writing at 19400 strikes, then 19700 and 19900 strikes,
On the Put Side, the maximum open interest was visible at the 19400 strikes, followed by the 19300 strikes, with writing at the 19300 and 19400 strikes.
Important Upcoming Weekly Activities
Summary - Overall
On the occasion of Mahurat Trading on Sunday, the market can show strength in buying through the fundamental stocks.
We need to find that on the closing basis, if the market closes above odd levels of 19500, this would be a good sign for the coming weeks, that due to FIIs short covering, it can take the market to much higher levels.
We are of the view that at a a lower level, the market has a strong point of support level of 19315, but currently market is hovering near the average of FII's short position which is placed roughly at 19423. We are of the view that If the market breaks out the level of 19520, we can see the higher side of 19700 levels. Where again we can see resistance at 19670 levels on a closing basis.
In the previous week India VIX increased by 2% from its previous level, it can again play a crucial role if FIIs start selling in the cash segment.
While investors can continue to ride the technical rebound above closing on 20-Week EMA (19520), it is equally important, that profits are protected at higher levels.
A cautiously positive approach is advised for the week.
Thanks for reading.
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.