Post Market Weekly Analysis
The Nifty 50 weekly Index opened at 19486.75 touched the high level of 19875.25 and slipped down to 19414.75 before closing at 19731.80. So the benchmark index oscillated in a range of 460.50 points over the previous week's trading sessions, finally closing with a gain of 306.45 points, i.e. in percentage term (1.58%) on a weekly basis.
Nifty 50 Index Monthly Chart
19849.75 was the top for the previous month, which has been surpassed by the November month candle and achieved the top of 19875.35 in the previous week.
It seems fireworks will continue and easily achieve the target of 20000 because FIIs have a lot of shots in the future, which need to be covered and this short covering will help to move beyond 20000, once again in a short span of time.
Nifty 50 Index Weekly Chart
The Weekly chart seems, super bullish as for the last three weeks, bulls have taken charge and we get 3 green candles, on the top of the last two tops. From 18830, the previous break out became support and the volumes have grown up from the last three consecutive weeks. This will definitely give a sleepless night to FIIs because they have no other option left, but to cover their future positions, in November month Expiry, if 19900 breakout decisively.
Nifty 50 Weekly Fibonacci Chart Statu
Fibonacci levels are moving smoothly. It touched 0.236 levels in the previous week and is now ready to jump towards 0 level. which is 20222.70 in the Nifty 50 Index Chart.
Nifty 50 Index Daily Chart
The daily chart is getting support from all SMAs, which is a good sign. It seems, 20200, would be the nearest target, which the market has already set to achieve in the month of November 2023. In our opinion, rejection from 19800 levels, is not going to become any major resistance level, it will be crossed soon.
Nifty 50 Index Weekly Chart -with Technical Indicators
RSI Indicator Pattern
The weekly RSI is 58.96; it remains neutral and does not show any divergence against the price.
This weekly indicator is at 62.58, which indicates the market has more potential to catch the highest mark of 80.00, before showing any reversal sign.
MACD Indicator Pattern
The weekly MACD is bearish and stays below its signal line. However, the narrowing Histogram suggests that the up moves have come with acceleration in the momentum.
FII's Cash Weekly Activities
The slowdown in FII selling especially after the decline in US bond yields with rising hope that the Fed is done with the rate hike cycle also lifted the equity market sentiment, but strong DII data suggest that the influence of FIIs on the market seems to be declining.
Foreign institutional investors net sold Rs 215 crore worth of shares during the last week due to two-day buying interest, but that is completely offset by domestic institutional investors who bought Rs 1580 crore worth of shares during the week.
Even for the current month, they bought Rs 7700 crore worth of shares in the cash segment against FIIs selling Rs 6575 crore.
The US 10-year treasury yields settled on Friday at 4.44 percent against 4.64 percent on a week-on-week basis, while the US dollar index dropped to 103.82, from 105.86 levels during the same period.
"The sharp decline in the US 10-year bond yields has turned out to be an inflection point for the mother market and thereby to the global stock markets. Markets now believe that the Fed is done with rate hikes and will slowly start discounting rate cuts in 2024, and if the declining trend in US inflation persists the Fed may cut rates by mid-2024. This can facilitate FPI inflows into EMs like India.
FII's Cash Monthly Activities
Outlook for the NIFTY 50 Index for the Coming Week
The markets kept up the rally for the third straight week, which ended November 17 with a 1 percent gain, despite banking and financial stocks being beaten by the Reserve Bank of India's move to raise the risk weights for unsecured loans.
The bullish trend in the market was supported by falling crude oil prices and hopes of an end to the rate hike cycle globally on the back of easing inflation.
The positive sentiment in the markets will sustain in the coming week too, with a focus on the US bond yields and oil prices, and advised continuing with the buy-on-dips strategy.
The previous week India VIX closed at 11.82 from 10.88 Within five trading sessions, it touched a high of 12.09 and a low level of 8.39, It gained on a closing basis by
0.7200 (06.48%) on a weekly basis.
The volatility increased for the second consecutive week but is still within the broad range of 8-13 levels for several weeks now. Meanwhile, the bulls retained their leading position in the market.
Support Level for the Coming Week for NIFTY:
The broader support level on the technical chart could be in the range of 19535 followed by the level of 19410 levels.
Resistance Level for the Coming Week for NIFTY:
The broader resistance level on the technical chart could be 19880, followed by 20075 levels.
Market participants will also focus on the oil prices that acted as another supportive factor for the rally in equity benchmarks. Oil, the biggest risk for emerging markets like India as an importer, is on a slide on the back of demand concerns, a steep increase in US crude inventories, and rising non-OPEC supplies.
Brent crude futures, the international benchmark for oil prices, dropped to a four-month low in the last week. Prices fell 1 percent during the week to settle at $80.61 a barrel, the lowest closing level since the second week of July, taking the total loss to nearly 13 percent from the October high ($92.38).
Technically, the market seems to be looking positive given the sustainability of the Nifty above the falling resistance trendline and continuing uptrend for the third consecutive week with a bullish candlestick pattern formation and higher highs, and higher lows formation for the second straight week. Also, it holds a 20-week EMA, which can be critical support for the Nifty50.
19600-19500 is expected to be immediate support for the Nifty50 index. If it manages to close above 19900 then we can expect a new high. Conversely, a decisive fall below 19,500 will be seen as a short-term trend reversal which can lead Nifty towards 19300-19100.
Reading Current Option Data
Options data also indicated that the Nifty50 may face resistance at 19900, which can decide the move towards 20,000-20,200 levels, with support at the 19500 mark.
On the Call side, the maximum Call open interest was seen at 19900 strikes, followed by 19800 and 20500 strikes, with Call writing at 19800 strikes, then 20400 & 20500 strikes.
On the Put Side, the maximum open interest was visible at 19700 strikes held the maximum open interest, followed by 19500 strikes & 19000 strikes, with writing at 19,100 strikes, then 19000 strikes and 19500 strikes.
Despite a robust 1,000-point rally in the Nifty, FIIs maintain a substantial 79 percent short exposure in index futures. This elevated level suggests that there is still room for a potential short-covering move
Summary - Overall
All in all, the markets have turned highly stock-specific and are expected to
stay this way for some time.
The pattern analysis shows that the Nifty remains firmly in an upward-rising
channel while keeping its primary trend intact. After retesting the full
throwback level of 18850-18900 when the index gave up all its gains, the
said level has acted as a very potent support on the expected lines. This had
led to the Nifty gaining over 750 points during the recent pullback. It has
crossed above the 20-week MA and stays firmly in an uptrend.
It is strongly suggested to remain selective while making fresh purchases as some consolidation at higher levels can be expected as well.
So while picking out good stocks with improving and strong relative strength, it would also be prudent to vigilantly guard profits at higher levels.
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.