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Nifty - Near All-time High again; Weekly Range wider between 19620 to 20000 & 20200 Levels

The Nifty 50 Index, posted better returns in the last eight weeks on the back of positive data points on a weekly basis, while sustained buying by domestic institutions and the possibility of a pause in rate hikes by the US Federal Reserve added to the rally, despite a poor monsoon, a rising dollar, higher bond yields and a surge in crude oil prices.

Post Market Weekly Analysis

The Nifty 50 weekly Index opened at 19525.05, touched the high level of 19867.15, and slipped down to 19432.85 before closing at 19819.95. so the benchmark index oscillated in a range of 434.30 points over the previous five trading sessions, finally closing with a net profit of 384.65 points, i.e. in percentage term (1.98%) on a weekly basis.

Nifty 50 Index Monthly Chart

The market has reached just near an all-time high, once again, Will it be able to cross this time, to make a new all-time high? If we follow the channel, the Index is trading and able to close above the previous month's high as far, and it is a kissing distance away from the new all-time high. If it crosses this resistance, obviously, it will create a new all-time high again.

Nifty 50 Index Weekly Chart

We need to see if the Nifty 50 Weekly Index is able to sustain 19990, on a daily closing basis, and able to cross its previous all-time high level easily, then we can see a very big and meaningful rally ahead because in that case, the index will again enter in unchartered territory. The Volumes from the last two weeks are spectacular, and above average.

Nifty 50 Weekly Fibonacci Chart Status

The Fibonacci weekly chart status is phenomenal, and it has again bounced back from its support zone of 78.6% toward 100% levels. Let us see if it breaks out of its previous high level or rest into consolidation mode.

Nifty 50 - Index Daily Chart with Expanding Channel

The expanded channel, we were following for many days has at last been Negated completely in the previous trading session. We were waiting for a follow-up candle from last week's session, and instead, we got all five sessions and were able to make incremental highs from the previous ones.

Nifty 50 Index Daily Chart

All simple moving averages support the daily candles, and volumes for all previous trading sessions are outstanding. the ways the previous week's trading sessions showed strong strength, it seems that we can see a new all-time high again in the coming week if we sustain above 19900 levels incrementally.

FII's Cash Monthly and Weekly Activities

Even as domestic equity markets posted solid gains last week, foreign institutional investors sold Indian equities worth Rs 9,300 crore. This was largely on the back of a fresh resurgence in the US dollar index and subsequent spike in US treasury yields.

Sharp currency weakness in China and Japan against the dollar also weighed heavily on the local currency leading to foreign fund outflows.

If the US treasury yields continue to rise and other currencies falter against the US dollar further, foreign fund inflows may remain choppy, and overseas investors could exit emerging markets, including India

Outlook for the NIFTY 50 Index for Coming Week starts from 11th September 2023

Strong macroeconomic data such as robust GDP and PMI figures helped the domestic indices experience a gradual rally throughout the week. Despite a mixed global trend marked by weak cues, Indian equities remained resilient, supported by this strong economic outlook

In the broader market, mid and small-cap stocks attracted strong buying interest, even though their valuations were relatively high. Moreover, heightened order inflows made sectors like infrastructure and realty particularly attractive to investors during the week.

"The market is now awaiting data on inflation and industrial production to provide further guidance.

Weak Macro sentiments remained volatile in European and US banks were under focus. Indian equity markets remained concerned about growth slowdown, higher interest rates, and valuation even as inflation (especially food inflation) remains elevated both globally and domestically,

On the hourly chart, the Nifty got rejection candles from the top of 19867 in the last two hours of the last trading session on Friday, which indicates consolidation is likely in the upcoming week. If it happened, then the range of consolidation is likely to be 19670 to 19850. Any dip could be considered a buying opportunity.

India VIX

The previous week India VIX closed at 10.87 from 11.36 Within five trading sessions, it touched the high of 11.54, It lost on a closing basis by -4.33%, and marginally declined 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 19620 followed by the level of 19500. levels.

Resistance Level for the Coming Week for NIFTY:

The broader resistance level on the technical chart could be 19900, followed by 20200, levels.

Reading Current Option Data:

Option data indicated that the the Nifty 50 Index may hit the next crucial resistance of the 20,000 mark in coming sessions, which has the maximum open interest as well as Call writing, with support at 19,700-19,600 levels.

Weekly options for the coming week:

The maximum Call open interest (OI) is at the 20000 level, with 1,58,550 contracts

Followed by the 20200 level with 1,03,956 contracts & 19900 level with 1,01,819 contracts

On the Put side, the maximum open interest is at the 19600 level with 1,28,157 contracts followed by the 19700 level with 1,15,171 contracts. Followed by 19800 option strikes, 19,700 option strikes, and 19,000 option strikes.

Broader Expectation

After a promising reversal formation, the Nifty has been holding a higher bottom formation and is comfortably trading above 50 and 20-day SMA (Simple Moving Average) which is largely positive. It has also formed a long bullish candle on weekly charts, which supports a further uptrend from the current levels.

For the trend-following traders, the 19700-19650 level would be the key support level, and above the same, it could rally till 19900. Further upside may lift the market till 20000. On the flip side, below 19650, the uptrend would be vulnerable and could see a short-term correction till the 50-day SMA or 19550-19500 levels.

Local and global Events to be considered

Overall, the Nifty 50 Index is expected to largely trade with a positive bias; some consolidation though cannot be ruled out. The low point of the previous week, i.e., 19432, should stay protected.

It is strongly recommended to continue to remain stock-specific in approach and also keep protecting profits at each higher level because India VIX continues to remain a concern.

This is advised not to short the market against the trend, it should be avoided till the direction is not clear but the protection of profits at higher levels is strongly advised over the coming week.

Thanks for reading.

Keep Trading

Stay Invested


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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