NIFTY-Weekly Outlook-Venkat's Blog

10 févr. 2024

The Index remained in a comparatively a narrow range and made an inside candle. It appears to be a consolidation phase before taking further direction. The sentiments reflect the cautious approach/lack of direction. Last week the Index attempted almost the same ATH of 22124 from where the selling started. The perception is that the ATH is a strong supply zone and bears make all attempts to initiate fresh shorts with known ATH level as stop. With the kind of selling seen on the weekly expiry day, it is evident that the Bulls are losing the grip. The ensuing week is crucial for the direction and the target.

A few observations from the weekly charts are:

• The index moved in a range of 424 points viz. between 22053 and 21629
  
• The oscillators of different time frames are showing mixed signals
  
• Option open interest to drive the direction of the market
  
• Expected scenarios for the ensuing week
  
• Unlike the earlier bull run, we find sellers emerge after every spike
  
• Volatility and choppy moves likely to continue for a couple of more weeks
  

 
Additional interesting observations

• Last week candle is an inside candle which can be treated as uncertainty of the direction
  
• Index may find supports at 21640, 20520, 21460 and the index could face resistances at 21940, 22070, 22130, 22310
  
• There were multiple gaps created during this dream run. The levels were repeatedly mentioned in the previous blogs. Since they are far away for now, they will be inserted back when relevant
  

Final Note

• The Index has stayed well above 55 DMA at 21300 and the 200 DMA at 19767
  
• The market is expected to remain volatile and witness choppy moves. This requires cautious approach
  
• There is a striking similarity between the formation in the weekly chart and that of the Monthly charts a few weeks ago. This is more of Bullish in nature where we saw a break above the triangle formation lead to a big up move. Only a close below 20850 will negate this. From the daily charts it is observed that the Index is on a minor trend which is still within the ascending channel.
  
• The fault lines lies at 21540 at the lower end and 2196 on the higher end.
  
• Most likely scenario would be a consolidation between 21540 & 21960. Breach on either side can lead to 200-300 points move
  
• Index still has an unfinished agenda of attempting 22220 and possibly 22450
  
• The ensuing week is crucial to decide further direction and target
  

#Stay Safe

Disclaimer: The views expressed here are personal and not connected to SYFX Treasury Foundation. The views are for learning and reference purpose only.