When I was writing the previous week's technical journal, I was under the impression that even Call Options are written massively at 20,000 levels, the benchmark index would not cross even 19900 levels, but I was wrong to measure the highest sentiments of FIIs inflows in Dalal street, which forced the benchmark index to reach at 19991.85 levels with the solid weekly cash inflow of 3115.26 Crore.
The Nifty 50 Index opened at 19612.15, touching the new all-time high level of 19991.85, and slipped down to 19562.95, before closing at 19745. so the benchmark index oscillated in a 428-point range over the previous five trading sessions, finally closing with a net gain of 180.50 points, i.e. in percentage term (+0.92%) on a weekly basis.
Nifty 50 Index Monthly Chart
With a new all-time high the Nifty 50 Index monthly chart is maintaining its strength.
All the simple moving averages are signaling to stay at their previous month's high levels.
It is enjoying the closing levels above the channel. the coming week is the month closing week, so we can say that the final closing will be above the previous month's level for sure.
Nifty 50 Index Weekly Chart
The Weekly Chart of the Nifty 50 Index is showing rejection from all-time high levels.
Profit booking seems in a volatile market, as some of the corporate results are not up to expectation. The banking sector still seems to outperform, which can help the index to be in the consolidation mood for the rest of the week.
Due to Monthly Expiry, we can not rule out very volatile trading sessions in the coming week.
Nifty 50 Weekly Chart (Fibonacci Chart Status)
As one can see, candles went beyond the Fibonacci levels i.e. 1.414 levels but return to its base near the support level of 19735 after getting a rejection from higher levels
In the coming days, Index can be volatile due to monthly expiry, but it does not seem it will cross the 1.618 level soon.
Nifty 50 Index Daily Chart
The Daily Chart ended up resembling a shooting star candle, but remember, a shooting star candle needs a follow-up candle for confirmation. If it creates another candle below its present low, only then it will be converted into a trend-reversal market. As of now, it seems only profit booking, which will help the market to consolidate for a shorter duration.
FIIs Weekly Cash Activities
Near the end of the monthly expiry, an 88.7k strong future Index Option chain, indicates, if these data roll over for the next expiry, in the coming week, it will be a strong signal, that the next month will be also in the bull's hand.
But if we witness a reduction in these figures, it would be a concern and we can see a strong profit booking from present levels.
FIIs Monthly Cash Activities
the Index reached a new all-time, with the help of strong cash buying by FIIs in July month so far. And it seems to be continued in the coming days also.
Outlook for the NIFTY 50 Index for Coming Week starts from 24th Jul 2023
A candle resembling a Shooting Star has been created on the daily charts. Obviously, this requires confirmation to be a trend reversal signal, only if a lower low is formed over the coming week.
Nifty scaled to a new high, falling short by a few points of the 20000 levels. However, on Friday, it slipped by 260 points, mainly led by a 9% crack in INFOSYS stock price decline. Bears took this as an opportunity to build Short CALLs
In a broader view, we can say that, till the market is above 18900, it is a bullish market only.
The current chart formation tells us that it has stopped the current rally at the higher level, and now the 19991.85, will become the highest rejection point, till it will be crossed decisively upside.
The Nifty Index is very likely to be slipped into a range-bound consolidation for a shorter time duration.
Reading technical chart pattern analysis shows that the NIFTY staged a major breakout by crossing above 18887; this was a breakout from a large ascending triangle formed over the past ten months. And now the bullish pattern will be intact, till 18900 will not be breached downside, in mid to short duration.
The previous week India VIX closed at 11.48 from 11.23, slightly higher by 7.51%
Support Level for the Coming Week for NIFTY:
The broader support level on the technical chart could be in the range of 19610 followed by the level of 19470.
Resistance Level for the Coming Week for NIFTY:
The broader resistance level on the technical chart could be 19850 followed by the levels of 20000
The next week's highlights are:
Corporate results for the first quarter continued with mixed earnings
FED interest rate decision
High Inflation in consumer products
FII's continuous Inflows; 17700 cr buying in cash in July month so far
OIL prices jumped to 81 USD per barrel on Friday.
Domestic Economic Data Points
Reading Current Option Data:
As per Options data, 19,600-19,500 can be a near-term crucial support area for the Nifty 50 Index, while 19,800-20,000 is expected to remain as critical resistance.
The weekly Options data indicated that the maximum Call open interest was seen at 19,900 option strikes, followed by 19,800 and 20,000 strikes
On the other side, we have the maximum Put open interest at 19,000 strikes, followed by 19,800 strikes and 19,500 strikes, with Put writing at 19,600 strikes, then 19,100 and 19,500 strikes.
Till 19,500 still remains a strong support for Nifty and the Index is likely to take support over here, and 46000 intact as a support level on Nifty Bank Index, we will see an upward rally in the Nifty 50 Index from support levels.
All in all, there is a strong possibility of the markets taking a breather and consolidating within a defined and limited range.
In view of this, we should adopt a highly stock-specific approach and navigate the markets on a highly selective note.
Profits on the existing holdings should also be protected vigilantly at current and higher levels.
A cautious approach is advised for the coming week.
Thanks for reading.
Disclaimer: I am not a SEBI Registered technical Analyst, so consult your financial advisor, before taking any trade. This technical weekly Journal post is only for learning purposes and its a free of charge. The views written here are completely only my personal views. I am not suggesting here anyone follow my views. I do not have any WhatsApp Group ID or Telegram ID related to it.