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Nifty -Truncated Week; Concerns below 22200 Fibonacci 50% Level; 21900-22730 Levels-Wide Consolidation Expected

The Nifty 50 Index initially extended their technical pullback in the previous week and extended their up-move; however, at the same time, the last trading day of the week saw the markets coming under strong selling pressure, which was inline as it was expected.

Post Market Weekly Analysis

The Nifty 50 weekly Index opened at 22336.90 touched the high level of 22625.95 and slipped down to 22198.15 before closing at 22419.95. So the benchmark index oscillated in a range of 427 points over the previous week's trading sessions, finally closing with gain of 272.95 points, i.e. in percentage term (1.04%) on a week-on-week basis.

Nifty 50 Index Monthly Chart

Rejection from all-time high was expected and it is inline with our estimation. In this month on Monthly chart , Nifty 50 Index has touched its lowest level, approximately similar to previous month lower levels, and got rejection from lowest level. Buying emerges sharply, but at the same time profit booking seems from highest level again. Which indicates that this moth can close in a Dozi candle formation, if an another selling bout will emerges again on coming days.

Nifty 50 Index Weekly Chart

After two week's downfall, Nifty weekly index trying to taking support from its lowest level the week opened gap up and again feel the heat at higher levels, where profit booking took place. FII relentless selling making tough for bulls to go further up.

On volume front, it a little up from previous week's selling volumes. The 9-week SMA and 20-Week SMA s giving support as of now it seems. In coming week below 22198, the weak momentum, can drag again the weekly chart to 22000 followed by 21900 levels. The bullish area will be after crossing the 22630 levels only.

Nifty 50 Index Daily Chart

The Nifty Daily index is taking support from 20-Day SMA, if drifted further the Index can breach 22298, followed by the next support level of 22230 and below that 21900 is the only support exists. On bullish side, 22500 is the round figure, which can become its first resistance and followed by 22600 and 22775 levels will become further resistance for coming week.

Nifty 50 Weekly Fibonacci Chart Status

The Nifty witnessed selling pressure throughout the last day of trading session and closed weak for the day down 120 points. On the daily charts, we saw that Nifty faced selling pressure from the resistance zone of 22,560–22,625. Until this zone is not taken out decisively, we can expect the consolidation to continue. On the downside, crucial support is now placed at 22240 – 22200 where support parameters in the form of the 40-day moving average and the 50% Fibonacci retracement level of the rise from 21,777 – 22,626 .

Nifty 50 Index Weekly Chart -with Technical Indicators

RSI Indicator Pattern

The weekly RSI stands at 64.98; it stays neutral and does not show any divergence against the price.

Money Flow Indicator

This weekly indicator is at 69.46 which suggest due to high selling by FIIs, upside is limited. Real investor will wait further to finalize investment decision.

MACD Indicator Pattern

The weekly MACD is bearish and trades below its signal line. A Spinning Top occurred on the candles; this denotes indecisiveness among market participants.

Bollinger Band Indicator

The Bollinger bands are seen narrowing; this is due to the reduced volatility over the past weeks and this will contribute to keeping the markets in a narrow and defined range.

FII's & DIIs Cash Weekly and Monthly Activities

Monthly Activities (since Jan 2024)

Weekly (Previous Week daily activities)

Outlook for the NIFTY 50 Index for the Coming Week

We have a truncated week coming up once again with Wednesday (May 01) being a trading holiday on account of The markets have largely remained in a defined trading range with the 20-week MA which is currently placed at 21994 acting as

immediate support on a closing basis. On the upper side, the previous week’s high shall continue to post strong resistance. In a nutshell, so long as the Nifty can defend the 21950-22000 levels, it will stay in a range; a violation of this support zone will invite incremental weakness in the markets.

India VIX:

The notable happening on a technical front was a sharp decline in volatility. The India VIX came off by another 18.82% to 10.93.

The weekly India VIX closed at 10.92 it touched a high of 13.4575 and a low level of 9.85. India VIX, the fear gauge, lost 18.82 percent during the week to -2.5325.

Support Level for the Coming Week for NIFTY:

The broader support level on the technical chart could be 22100, followed by 21900 levels.

Resistance Level for the Coming Week for NIFTY:

The broader resistance level on the technical chart could be the level of 22615, followed by 22730 levels.

Important Upcoming Monthly/Weekly Activities

Technical Analysis

The technical analysis of the weekly chart shows that the 20-week MA, which is placed at 21994 is the most immediate support for Nifty on a closing basis. A violation of 21950-22000 may bring in some more weakness in the index. This being said the markets continue to remain vulnerable to selling pressure at higher levels; no runaway up-move is likely until the Nifty crosses above the 21650-21700 zone


Reading Current Option Data

Options data also indicated that the Nifty 50 Index may face resistance at 22,500-22,600 levels in the upcoming week, with support at 22,400 and 22,200 levels.

On the Call side, the maximum open interest was visible at 23,000 strikes, followed by 22,600 & 22,500 strikes, with meaningful writing at 22,900 strikes, then 22,700 strikes.

On the Put side, the 22,000 strikes owned the maximum open interest, followed by 22,400, 22,300 and 22200 strikes, with writing at 22,300 strikes, then 22,200 strikes.

Participant Wise Final F&O Weekly Summary

FII's, PRO, and Clients F&O Summary by Segment

1). FII's positions as of the last trading day:

2). PRO's position as of the last trading day:

3). CLIENT's position as of the last trading day:

Summary - Overall

Overall, we may continue to see the markets remaining in a defined trading range with the zone of 21950-22000 acting as immediate support. Importantly, the low levels of VIX would require the market participants to stay cautious of any spike on this front as may adversely impact the markets.

It is worth noting that low levels of VIX are due to reduced volatility, and this

reflects complacency on the part of market participants.

Often major market tops are formed when VIX stays at its lowest levels for a prolonged period. In the present situation, it is of paramount importance that unless the Nifty forms a new high, we should be using all up moves to vigilantly protect profits at higher levels.

All fresh purchases must be made in the defensive pockets or in those stocks that are enjoying strong relative strength against the broader markets. Overall, a cautious approach is advised of the upcoming truncated week.

Thanks for reading.

Keep Trading

Stay Invested


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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