Updated: Feb 7
As we have suggested in our last technical journal, the Nifty 50 Index almost touched 200 DMA, which was stated at 17300.35. This week, the Nifty 50 Index opened at 17541.95 and touched a low of 17353.40, before closing at 17854.05. Well, we missed the budget rally, because of Adani-Hindenburg Saga, but now the market is getting back to sense and climbing slowly to regain its peak.
Nifty 50 Index Daily Chart
The Nifty 50 Index Daily chart is quite bullish and seems ready to break out. If it breaks out at 17880, then the big resistance is at 17960, where we can see the consolidation for some time. But once it is taken out 18000 can break out once again and we can see the next resistance at 18265, from where the market is thrown down by bears to approximately nearly 17300.
Nifty 50 Index Weekly Chart
The Nifty 50 Index Weekly Chart is not much bullish, and it is struggling to cross the previous week's high. Well if we can see, we will find that in case next week by Monday, if the Nifty 50 Index is unable to cross specified marks, it can again drag down the weekly chart to a new bearish territory, in case it breakdown its own this week low. So ready for a see-saw ride.
Nifty 50 Index Monthly Chart
The Nifty 50 Index monthly chart is the only chart where all the candles are standing above all types of DMA levels. This gives us a little strength that most probably, we are ready to break out even if the FIIs are still big sellers in our market.
The Outlook for Next Week starting from 6th Feb-2023
As per the core technical perspective, the NIFTY has violated the short-term 20-Week Moving Average after taking support on it for five weeks.
This 20-Weekly Moving Average is presently at 17912. Unless this point is taken out, it is likely to pose some resistance to the Index on a closing basis.
Another important resistance point to watch out for is that of the 100-Daily Moving Average which is presently at 17945. This makes the zone of 17900-17950 an immediate and important resistance area for the Nifty going ahead from here.
India Vix: Dropped at 14.39 from 16.87, which shows the premiums from both sides eroded drastically on a weekly basis
Support of the Week: We can see that the support for the coming week can come in much lower at 17520 and 17460 levels.
Resistance of the Week: We can see the major resistance levels are at 17950 and, if the Nifty 50 Index will break this level, then we can see the highest level at 18190.
Even with all major events out of the way, the markets are likely to continue
to remain in a wide trading range, unless the zone of 17900-19750 is taken
Sectors like, IT, Public Sector Enterprises, and some selected Auto stocks can do well. Stock-specific action can be seen this week.
Overall, a stock-specific cautious approach is advised for the coming week. Avoid enjoying leverage at least this week. In Options do not take overnight positions, if you are not confident about it and should be covered by strict stop-loss or hedged positions only.
Disclaimer: I am not a SEBI Registered technical, so just remember, to consult your financial advisor, before taking any trade. This technical post is only for learning purposes.
Thanks for reading.