NIFTY-Weekly Outlook-Venkat's Blog

29 Eki 2023

The market witnessed a sharp sell-off when the crucial support at 19430 got breached and also on account of the intensifying conflict in the gulf region. In just three sessions it lost about 700+ points. The Geo-political risk perceptions coupled with the higher interest rates were major cause of concern for equity markets across geographies. With just 2 sessions for the monthly closing candle the market to remain volatile.

A few observations from the weekly charts are:

• The index moved in a range of 720 points viz. between 19556 and 198837
  
• The oscillators of different time frames are showing negative signals
  
• Monthly closing candle and open interest to drive the direction of the market
  

 
Expected scenarios for the ensuing week

• Index erased lost most of the gains made in the past three months and the current move mirrors the move made during last week of June 23 and first week of July 23.
  
• The re-attempt of 20K would be a herculean task, given the change in risk scenarios
  

Additional interesting observations

• Bears tightened their grip the moment 19400 was breached and subsequently, all earlier supports did not even hold for sometime
  
• Index may find supports at 18910, 18840, 18640 and the index could face resistances at multiple levels 19170, 19230, 19340, 19460
  
• There were multiple Gaps created during the up move, which have been highlighted in the previous blogs. The irony is that, what appeared as far off, got covered in a single week
  *18818-18908 (28th Jun 23) Covered
  *18972-19079 (29th July 23) Covered
  *19189-19246 (3rd July 23) Covered
  *20063-20133- Got filled yet a new Gap created 20133-19980* Covered

Final Note

• The Index has stayed well above the long-term trend line and the 200 DMA at 18612 and moved sharply away from the 55 DMA at 19582
  
• The Ascending channel support is broken and 19460 could be a strong resistance going forward
  
• With sentiments deeply negative, every spike is expected to be sold-off
  
• The distinct fault lines lie at 18840 on the lower end and 19250 on the higher end
  
• The ensuing week is expected to be volatile and likely to see whipsaw moves due to changes in Geo-political risk perceptions and the Monthly closing candle
  
• There seem fair chances of moving towards Index moving towards 200DMA at 18600 zone, if the present support at 18840(Fib retracement on line chart) is breached on a closing basis
  
• The good results posted by top companies have not helped much
  
• We might see a longer and painfull period if we do not see a monthly close above 19400
  

#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.