NIFTY-Weekly Outlook-Venkat's Blog

The Index managed a smart recovery towards the earlier peak and closed with a positive candle for the week. The risk perceptions seem to tilt towards a positive bias. However, this time the moves were steady after initial sell-off on the first day of the week. Cautious approach continues as the perception is that the ATH is a strong supply zone and bears may make all attempts to initiate fresh shorts around the known ATH. This week is crucial for the further direction and the target.

A few observations from the weekly charts are:

• The index moved in a range of 538 points viz. between 22068 and 21530
  
• 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
  
• Volatility and choppy moves likely to continue for a couple of more weeks
  
• Unlike the earlier bull run, we find sellers emerge after every spike
  

 
Additional interesting observations

• Index managed to recover the losses made during the previous week. The weekly close near the top of the range is seen as positive
  
• Index may find supports at 21940, 21830, 21670 and the index could face resistances at 22130, 22220 and 22360
  
• 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 21476 and the 200 DMA at 19867
  
• 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.. From the daily charts it is observed that the Index has crossed over the minor trend which is an descending channel. The target for this is around 22270
  
• The fault lines lies at 21830 at the lower end and 22270 on the higher end.
  
• Most likely scenario would be a consolidation between 21830 & 22230. 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.