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Nifty - Week by Week maintaining Weak Signals

Updated: Feb 19, 2023

In our previous technical journal, in the section "Outlook of the coming Week", we clearly suggested that in short term, Nifty-50 Index can break out and can have a short run towards 18200. And it exactly did the same.

Before closing at 17944, the benchmark index touched a high of 18134.75. And it happened just due to short covering. Technically Nifty -50 Index and Bank Nifty Index are still in a weak zone from the mid-term chart reading perspective.

Let us discuss the Nifty 50 index in different time frames:

Nifty-50 Index Monthly Chart

We can see in the Nifty 50 Index Monthly chart that on 19th Oct 2021, the benchmark index touched the high of 18604.45 and then it breaks its own high on 1st Dec 2022 and touched another high at 18887.60.

But till that day, it is not able to touch it again at its own high. Interstingly, it is dragging its feet on lower boundaries.

Nifty 50 Index Weekly Chart

The Nifty 50 Index Weekly Chart is clearly showing that it is already derailed below its important level.

The 20-Week Moving Average which is currently at 17981, was important from the last 5 weeks on the weekly charts. But now candles have already started closing below, which claims that now 17981 will become a strong resistance from now onwards, till it breaks up in the future.

Nifty 50 Index Daily Chart

On the Nifty 50 Index Daily Chart, the benchmark index has closed just a notch below the crucial 100-DMA which is placed at 17967. With 50-DMA placed at 18033.

Now the NIFTY 50 Index Daily Chart has multiple resistance levels to navigate between 17950-18050 levels on both daily and weekly charts.

In other words, only any meaningful up move can move benchmark indices to past 18000 – 18100 levels convincingly.

Outlook for Coming Week starts from 20th Feb-2023

From the mid-term to long-term perspective, we can see that Nifty-50 Index is making lower lows and lower highs from 1st Dec-2022 onwards to date. We have seen it anytime, it could not break it's previous high (on a closing basis) consecutively first-time high was 18887.60 then it was 18696.10, then it was 18473.35 then it was 18201.25, and now 17944.20. It is interesting to see that will it cross its nearest high limit anytime soon. or it will continue its dragging spree shifting downside slowly. Strictly it is In my own opinion, If it will continue dragging the downside itself, I am sure, we can see the benchmark index at 15200 soon in a mid-term perspective.

INDIA VIX: The India VIX is called a volatility barometer, which has been trading near its lowest levels in recent times. It has inched 2.67% up to 13.09. This remains a cause of concern in the near term.

Support Level for the Coming Week: We can see the support coming from the level of 17900 and it breaks decisively, then 17780 could be the next support for the week.

Resistance Level for the Coming Week: We can see the resistance level could be 17966. If it can be broken up, only then we can see the level of 18100 once again. But if it breaks again with volumes, we can see the level of 18250 also.

Unless the Index crosses up to 18100 levels, the markets will definitely not going to see any upward moves..

The overall approach to the markets needs to be stock specific and selective over the coming days.

The specific sector like IT sectors can move up, but do not believe its rally last long. Some Auto Sector stocks and from the defensive sector FMCG and Pharma could be good bets.

Thanks for reading. Keep Trading Stay Invested Regards, Neeraj Bhatia (Managing Director) 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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