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Nifty - Range shifted down between 18900 to 19500

Post Market Weekly Analysis

The Nifty 50 weekly Index opened at 19320.65, touched the high level of 19584.45, and slipped down to 19229.70 before closing at 19265.80. so the benchmark index oscillated in a range of 354.75 points over the previous five trading sessions, finally closing with a net loss of 44,35 points, i.e. in percentage term (-0.23%) on a weekly basis.

Nifty 50 Index Monthly Chart

This week again, we can say, the positive point is that the Nifty 50 Index could not break the previous month's low level, which was sitting at 19234.40. No doubt, it tried hard to break it with the low level of 19229.70, but the closing for this week was again above 19265.80. With the selling spree by FIIs, we can not say that this week will be able to hold in the coming week. Obviously Not sure of it.

Nifty 50 Index Weekly Chart

After closing with 5 consecutive RED candles, giving the message that in the initial two trading sessions, the benchmark index was closed in doji, which indicates indecision. and from the third day itself, it converts itself, into a decision mode and closes its previous day's low, which means bearish only, which trend followed till the last trading session.

Nifty 50 Weekly Fibonacci Chart Status

In the previous week's technical journal, we emphasized that the benchmark index should not be closed below 19300 levels, but it happened this week. Now Index slipped below the 78.6% level, with the follow-up candle, which confirms that in the short term, we can see more downward trend. 19000 as a round figure level, can try to hold the index, but, if breaks decisively with volumes, then 18800-18900 levels will be opened immediately to reach on.

Nifty 50 - Index Daily Chart with Expanding Channel

This week, Index tried to break the trendline of the expanded channel, but soon the heavy selling in the cash segment by FIIs brought it down into within the channel range.

Nifty 50 Index Daily Chart

The last day of the previous week's trading sessions is the worst performing day of the trading session, where FIIs sold 4638Cr equities in the cash segment, which indicates that they want to protect their money in US bonds or other segments, than the equity segment.

Now on the Nifty 50 Index Daily chart, candles are closed below 50 SMA trendlines, and this could take rest only, to each 100 SMA trendlines in the near future.

FII and DII Weekly Trading Activities

The FII flow seems to be heading for a negative close for the month of August, as so far, we have seen FIIs net selling at Rs 15,821 crore in the cash segment in current month against net inflow in the previous five consecutive months, which largely attributed to the strength in US dollar index (trading above 104) and US 10-year treasury yield trading at around 4.25 levels. But, domestic institutional investors (DIIs) have managed to compensate the same, by pouring in Rs 17,742 crore in the current month.

Outlook for the NIFTY 50 Index for Coming Week starts from 28th August 2023

Closing below 50 SMA, which was sitting at 19374, after defending it for four days, is a worrying signal. The previous week was important from a technical perspective.

Now this is clear that the resistance level is being dragged lower and capped at 19400 and 19500 levels for the near future.

The technical analysis shows that the index took a breakout level from 18900 to reach to new all-time high level of 19991. So if it returns to test the breakout level again, it will complete the corrective cycle.

In this case, if the 18900 level breaks down decisively with volumes, then the trend reversal, will be confirmed, after a follow-up candle pattern.

India VIX

The previous week India VIX closed at 12.08 from 12.14 Within five trading sessions, it touched the high of 12.59, It lost on a closing basis by -0.49%, 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 19110 followed by the level of 18900. levels.

Resistance Level for the Coming Week for NIFTY:

The broader resistance level on the technical chart could be 19410, followed by 19490, levels.

Reading Current Option Data:

Options data suggests a broader trading range shifted lower between 18900 to 19500 zones while an immediate trading range between 19110 to 19400 zones.

On the Call side, 19300 option strikes are standing as an immediate hurdle with having an Open interest of 2,03,396, where the change in OI happened on the last trading session is 1,66,166. On the higher side, the call side option strike of 19500 has the biggest Open Interest of 2,44,931

Another side on Put Side, 19200 strikes are standing only with the highest number of Open Interests of 1,24,165, in which the change in OI that happened on the last trading session is 40,262 followed by 1,70,401, on 19000 option strikes.

Overall, in the coming week the markets could continue to display a corrective nature, as well as those who missed the bus previously at 18900 levels, will see an opportunity to buy strong-performing stocks to add to their investment portfolio, which could be in defensive stocks like, IT, Energy, PSE, Pharma and Consumptions, etc., with low beta.

It is recommended to continue staying highly stock-specific in nature and selective in approach while maintaining a cautious approach for 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 suggesting here anyone to follow my views. I do not have any WhatsApp Group ID or Telegram ID related to it.

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