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Nifty -Staying above 19570; Momentum is bullish; 20000 is still on the card; 19875 Level is Watchful

Updated: Nov 29, 2023

The previous week, was a lackluster week. The market is looking for some momentum after ranged bound week. The next week will get momentum from the Exit polls and GDP data. The level of 20K is still on the card. FIIs played well, and they were succesful to keep market below 19800 at closing basis.


Post Market Weekly Analysis


The Nifty 50 weekly Index opened at 19731.15 touched the high level of 19875.15 and slipped down to 19670.50 before closing at 19694.70. So the benchmark index oscillated in a range of 205 points over the previous week's trading sessions, finally closing with a gain of 62.90 points, i.e. in percentage term (0.32%) on a weekly basis.


Nifty 50 Index Monthly Chart



If you observed earlier, we have not seem any strong monthy candle in the near past like this month candle. After 550 point fall in previous month, this candle has gained approximately 715 points till now, even we have 3 more trading sessions in this month left.

This gives a feeling that the level of 20000 is still intact and we can reach it soon.


Nifty 50 Index Weekly Chart


This is the 4th week, when Nifty created a higher high candle so far. Above the lveld of 19785, we will see the fire work, because this is the point where FIIs have to run for short cover, they are still 130K short on index.


Nifty 50 Index Daily Chart



From last two trading days, due to lackluster trading, traders book profits and the last day we ended with dozi candle, which is a indecisive candle. Till we are above 20 Weekl Moving average, we are still in a bullish phase.


Nifty 50 Weekly Fibonacci Chart Status



Because we reched the level of 19875, in previous week, so we connect the highs to the immediate higher levels and now we can see, if the Nifty 50 Index, cross the level of 19875, the next level would be 20200, which can be achievable, if FIIs run for cover thier shorts.


Nifty 50 Index Weekly Chart -with Technical Indicators



RSI Indicator Pattern


The weekly RSI is 59.85; it continues to stay neutral while not showing any divergence against the price


MoneyFlow Indicator


This weekly indicator is at 68.38, 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 stays bearish and remains below its signal line. No major formations on the candles were seen


FII's Cash Weekly Activities



The indication that Federal Reserve may be done with the rate hikes after further all in US inflation and a fall in US bond yields from 5 percent to around 4.4 percent seem to be key reasons behind the FII inflow.


They have net bought Rs 1473 crore worth of shares in the cash segment, cutting down the net monthly outflow to around Rs 5100 crore now, from Rs 6500 crore in previous week, while domestic institutional investors' buying was higher (at Rs 2112 crore) than FII inflow, taking monthly inflow to Rs 9800 crore.



FII's Cash Monthly Activities


We can see thenumber are reducing; From -6574, now FIIs selling reduced to -5101, which is a good sign, that FIIs are turning into buyer.


Outlook for the NIFTY 50 Index for the Coming Week


The analysis of Nifty on the weekly charts shows that the Index continues to inch higher while staying inside a rising channel. Having said this, in the previous week, the index has formed a similar top and higher bottom on the charts. This makes the level of 19875 one of the pattern resistance levels.


Overall, the zone of 19850-19900 remains an important resistance zone; unless this zone is taken out, the Nifty is likely to stay in a dened range and consolidate. The most immediate support on a closing basis is at 20-week Moving Average which is presently placed at 19570.69.


India VIX:


The previous week India VIX closed at 11.33 from 11.82 Within five trading sessions, it touched a high of 11.39 and a low level of 11.28, It gained on a closing basis by

0.0100 (0.09%) 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 19610 followed by the level of 19480 levels.


Resistance Level for the Coming Week for NIFTY:


The broader resistance level on the technical chart could be 19900, followed by 20030 levels.


Technical Analysis


The Nifty 50 Index maintained upward journey for fourth straight week with making higher lows for four days in a row and faced strong hurdle at 19850-19900 area on the higher side, while taking strong support at 19600, which coincides with the 20-Day EMA.


Further, it sustained above 20-week EMA for three weeks in a row. Hence, if it decisively breaks the hurdle on the higher side, then 20000-20200 can be the possibility with support at 19700.


The 20-day EMA crossed above the 50-day EMA (19533) in previous week and remained above the same last week, which is a positive sign.


A decisive move above 19850-19900 levels is expected to open a sharp upside towards new all-time highs. Any weakness below 19,700 could find support at around 19600 levels


We feel the sentiment is anticipated to stay sideways as long as it holds above 19700. However, a drop below 19600 might exert downward pressure on the Nifty 50 Index.


Reading Current Option Data


Options data indicated that 19900-20000 is expected to be key resistance area for the Nifty 50 Index now, with immediate support at 19700 levels.


On the Call side, open interest was seen at 19900 strike, followed by 20000 & 19800 strikes, with meaningful Call writing at 19800 strike, then 19900 & 20000 strikes,


On the Put side, 19800 strike witnessed the maximum open interest, followed by 19000 & 19500 strikes, with Put writing at 19000 strike, then 19400 strike and 19600 strike.


Foreign institutional investors' (FIIs) short exposure in index futures remains elevated at 77 percent, and the put-call ratio (PCR) stands at 0.99, suggesting the potential for a short covering rally.


The fear index, India VIX corrected by 4.2 percent during the week to 11.33 levels, after rising in the previous two weeks, also supported bulls.


Summary - Overall


Overall the coming truncated week, the markets may continue to stay in a broadly definned range while staying devoid of any major directional bias.


A sustainable trend will emerge only after the Nifty takes out the 19900 levels comprehensively or violates 19500-19550 on a closing basis.


Unless either of these levels is taken out on the upside or violated on the downside, we will continue seeing Nifty in a trading range. It would be prudent to protect profits at higher levels while investing in stocks that are relatively stronger or have improving relative strength.


A selective approach is advised over the coming week.



Thanks for reading.

Keep Trading

Stay Invested


Regards,

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 forcing anyone to follow my thoughts. I do not have any WhatsApp Group ID or Telegram ID related to it.


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