NIFTY-Weekly View-Venkat's Blog

Nifty has been on steady decline for the second week. Past week resulted in formation of another bearish candle. While the consolidation at every stage is a healthy sign, it appears that the Nifty is showing signs of weakness ahead of the year end.

A few observations from the weekly charts are:
Weekly charts suggest that

• The index moved around 440 points viz. between 18255 and 18696
  the oscillators are showing negative bias
  Option OI is expected to drive the market direction
  The Index made lower highs and lower lows and it ended up with a bearish candle
  
  

Expected scenarios for the ensuing week

• Most likely scenario could be a consolidation between 18300 and 18770
  Though closed at 18269, the Index is expected to open higher
  As expected the Index moved lower towards 18250 on break of crucial Trend line support at 18400.
  Further the weekly closing is near the lows which is supportive of the negative bias. However, it is too early to conclude that the trend has completely reversed
  The zone between 18400-18600 has been a slippery wicket and witness a sharp move on either side
  The final support hinges at 17860-17940 zone.
  For the ensuing week, the index may find supports at 18160, 18040, 17960 and the index could face resistances at 18420, 18550 and 18670
  A daily close above 18460 required for keeping the hopes alive for re-attempt of ATH.
  Additional interesting observations
  The reversal from new ATH to breach previous Fib support of 18530 is considered negative
  Both FIIs and DIIs seem to be net negative (possibly on profit booking)
  Two possible scenarios
  Expected range of 17960-18420 or 18170-18550
  Any close outside the range of 17960-18550 requires re-assessment of risk
  
  

Final Note

• It so happens that when a long term trend line is breached and the prices reach a new peak, there would be profit booking which brings down the price as close to the break-out levels. We are currently in this scenario and we can expect the move to drag the NIFTY towards 17960.
  If for any reason we see a closing below 18170 then there are chances that we may see further correction towards 17960
  This week will be crucial to see whether Bulls meekly surrender their grip and the we are looking at a scenario of start of a bear cycle in the New Year.
  There are higher possibilities of churning of portfolio
  Possibly the last weekly Blog for 2022.
  

Seasons Greetings and Best wishes for a Happy New Year 2023

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