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Nifty - To Reach ATH it should hold the 18265 Level

The previous week's benchmark indices ended with a wider range as we expected and suggested in our previous technical journal. We anticipated it to travel between 17500 to 18000. In the previous week, the Nifty-50 weekly index oscillated in the 476.65-point range. Nifty, which gained on all five days, went on to post a decent gain of 441 points (+2.50%) on a weekly basis.


Let us discuss, the current status of our char pattern suggested now.


Nifty 50 Index Monthly Chart

As we expected the Nifty 50 Index monthly chart will close in the GREEN candle and the same happened for April 2023 month. Now the green candle crosses the ultra-short-term channel(yellow) and touched the short-term channel(pink), which is a sign of a little more bullishness ahead. There is an expectation that the benchmark index can move higher and higher till it holds the 18000 level.


As of now, the Nifty index is sustaining above the all-moving averages in Nifty Monthly Chart. Which shows bullishness.


Nifty 50 Index - Weekly Chart

In the Nifty 50 Index Weekly chart the last candles already entered the short-term channel, so a bullish move can be expected in the coming days, but on a closing basis, the Nifty should not be closed below 17900-17950, in any case in the coming week. As soon as it happened, then 17800 will become the crucial support level.


As of now, Index has retained itself above, and all moving averages are supporting the bullish move as of now.


Status of Head & Shoulder Pattern on Nifty Weekly Chart

We are discussing the formation of head and shoulder patterns on a weekly time frame multiple times. We can see the right shoulder is exactly touching the height of the Left shoulder. It seems now we are in the CAUTION zone. It seems at this level, traders should start saving partial profits and should avoid creating any fresh positions.


But in case, if once again cash buying starts by FIIs on Tuesday morning and maintains for the first half of the day, this will force the resistance level of 18265 to be broken decisively easily and then we can see the market be moved towards an all-time high without any meaningful retracement.


Nifty Fibonacci Chart on Weekly time frame:

The above chart is showing that the Nifty 50 weekly index is completing its 61.8% of retracement. So this is again showing caution for traders.


No doubt, if the Nifty will open Gap up 200 points on Tuesday, this will force 18200 option call writers to run for cover and this can make Nifty once again in the grip of bulls because of the short covering rally.


Nifty 50 Index Daily Chart

The Nifty 50 Index Daily Chart shows that Nifty has already moved into the short-term channel for the last 5 trading sessions/days, and it is reaching near its previous strong resistance level, which sits at 18265.


If Nifty is able to break it decisively, only then the next level for Nifty would be its previous all-time high levels.

The Nifty index has already broken the strongest level of 17800 and 17966 very smoothly and also it closed above the level of 18057, which was also one of the strongest resistance levels.


Now we need to watch closely if the benchmark index will be able to reach its immediate resistance level and if will it be able to sustain and able to give closing above 18265 on Tuesday. If it is successful for at least 30 minutes then we can see all time high in this week only.


As of now, all the moving averages support the candles on the daily chart.


Outlook for the NIFTY 50 Index for Coming Week starts from 2nd May 2023


The previous week's rally was well predicted by the options writers, as they had a decent short PE position at the 17800 strike price. On the higher end, less significant short CE built up at the higher strike prices was visible.


On the higher end, Nifty might continue its upward journey till it holds above 18000 on a closing basis. Resistance on the higher end is placed at 18265, above which a further rally might come towards an all-time high level.


Support Level for the Coming Week for NIFTY:


As per technical charts, we can see the border support coming from the level of 17900 and if it breaks decisively, then 17800 is the strongest support, breaking only that would be then 17710 is the next support level to be watched for.


Resistance Level for the Coming Week for NIFTY:


We can see the broader resistance level on the technical chart could be 18130, followed by 18265. Breakout above will bring the next resistance only at ATH.


The trading range is likely to get wider this week.


FIIs activity on the first day of the new May 2023 series is as under:


A negligible number of index futures shorts are seen, but surprisingly on Friday last 30 minutes has seen cash buying by FIIs and this number is significantly high than usual.


Market Health condition is showing that we are traveling in Extreme Greed Zone.

So, it is suggested that one should avoid opening fresh positions as markets are overbought and likely to turn downwards.


We chased the market for high levels, but now we must be chasing the up-moves very cautiously. It is just a matter of time before we might see ourselves getting caught on the wrong side of the trade.


The long players should very strictly trail their stop losses. Any fresh purchases should be kept very stock-specific and preferably outside the front-line indices.


It is time that we get ultra-selective in our approach toward the markets and protect all profits in an extremely vigilant manner.


Thanks for reading. Keep Trading Stay Invested Regards, Neeraj Bhatia (Managing Director) https://www.crbpvl.com/ Disclaimer: I am not a SEBI Registered technical Analyst, so consult your financial advisor, before taking any trade. This technical post is only for learning purposes.

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