As stated in our previous week's technical journal, we stated that below 18030, The Nifty 50 Index can drag itself down in the zone of structural damage.
Notwithstanding It is not a time to see Monthly, Weekly, or Daily charts, it is the time to see the long-term Nifty50 Index pattern, which is always giving returns more than other financial instruments.
Nifty 50 Monthly Chart
The nifty 50 Index monthly chart is forming a bearish engulfing candle, which is indicating toward bearish trend. We have been discussing the same pattern for the last two to three weeks.
It has already broken the level of 17838 on a closing basis, which is not good for a short-term trend. the Nifty 50 Index needs to regain its level as soon as possible to save for a long-term downfall.
Nifty 50 Index Weekly chart
If you see from the weekly chart, the Nifty 50 Index has given a closing below (it is not monthly closing as of now) the level of 18644, (the highest level of 18th October 2021), which is not good closing as of now, if monthly closing will be done below this level, it will confirm the long term structural damage for the time being. 17779 is the lowest point of the Friday, which is very near to 17775.
The trading below with consolidation will be harmful to the Nifty 50 Index for the short to medium term.
In summary, the Nifty 50 Index should not be closed below 20 SMA in the December month expiry, otherwise, below this level, the downside towards 15000 will be open soon, as we have indicated in our previous post
The Nifty 50 Index Daily Chart
The Nifty 50 Index Daily Chart is showing a complete disaster picture, where Friday was Black Friday for long-term traders and the hope dashed for a quick recovery, once it is broken down the 18000 level decisively.
The Outlook for the coming week started from 26th Dec-2022
The previous two weeks have been technically damaging ones; the slipping of NIFTY below 18600 levels has dragged the resistance levels lower for the Index.
Now from 18400 to 18600 becomes a strong resistance zone in form coming days.
20 Week EMA is a strong level to be watched, which is 17838.
If this level is defended this week, then only we can see the prolonged consolidation zone for some time period. but if it is not defended by this week's closing, it will invite a short-term weakness in the market, which can take the market to more lower levels.
The Support Level for this week:
This week we need to watch the key support level for the Nifty 50 index is 17775, followed by 17711 and 17608.
The resistance level of this week:
If the index moves up, the key resistance levels to watch out for are 17982, followed by 18046 and 18150.
Volatility spiked as INDIAVIX surged 14.85% to 16.16 on a weekly basis.
The global markets have shown some respite from the downside; this may help our markets to begin the week on a relatively stable note.
Hypothetically, resistance for the coming week is expected to see levels of 17930 and 18220, and the supports can come in at 17710 and 17580 levels.
Big Players like FIIs, will be not active in the holiday season and is likely to keep overall volumes at lower levels; this may likely keep the overall markets within a defined range.
There are strong possibilities of a technical pullback given the kind of one-way decline that we have witnessed, but below 18220, it would still sell on the rise. We can see a meaningful uptrend only crossing above 18600, which could be in the Budget rally.
We may see the defensive stocks doing well but the renewed-covid fears may well keep the markets a bit tentative over the coming days.
It is strongly recommended that leveraged positions must be kept at modest levels and profits on either side of the move must be vigilantly protected.
Again, a cautious outlook is advised for the week.
Thanks for reading.