NIFTY-Weekly Outlook-Venkat's Blog

The past week saw a steady decline after hitting a high of 17863, on account of profit booking. Almost 4 sessions the index moved in a narrow range with pivot around 17620. With the index getting back closer to the long term trend line support, the question is whether it would bounce back or give-up. With month end option expiry due it would be an interesting week ahead.

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

• The index moved in a range of 310 points viz. between 17553 and 17863
  The oscillators of different time frames are showing mixed signals
  The Index returns back to the break-out levels of the long term trend line
  Option open interest to drive the direction of the market
  Expected scenarios for the ensuing week
  Index may find supports at 17560,16470, 17360 and the index could face resistances at multiple levels viz. 17670, 17770, 17860, 17920
  Expected to remain in the range of 17470-17870 and any close outside the range requires re-assessment of risk
  Additional interesting observations
  Only a daily close above 17830 can see potential chances of scaling 18K mark
  There had been multiple Gaps created during the up move (These are for quick reference as these are risk zones for sharp moves)
  17126-17221(newly created gap)
  16650-16770 (far away for now)
  16360-16560 (far away for now)
  

Final Note


*The Index has stayed above the long term trend line and at a crucial juncture as it hovers around the 200 DMA at 17600
Going by the past occurrences, the index is expected to post a considerable monthly gains after three months of decline. With Just a week to go in this month the chances appear to be bleak
The daily chart shows a steep upward channel with top at 17840-70 range
This week is crucial to judge if a new trend is emerging towards attempt of earlier peaks or reverse after a short term gain
Market appears to be betting on the hypothesis that the interest rates are peaking and possibly expecting a pause instead of a hike
We are entering in to another crucial week and crucial range
Most likely scenario would be that the bulls attempt to enter 18K range provided we see a daily close above 17830 with the target at 18170. If the attempt fails, then we may see a consolidation between 17480 & 17870

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