NIFTY-Weekly Outlook-Venkat's Blog

31 dic 2023

Expecting a directionless market during the last week of Dec, did not update the blog last week. Appears that the market continues its celebration which started around Diwali. The November and December completely changed the outlook of the market. 2800 points gain in just months. The ATH keeps shifting every week. Major factors contributing to the change in sentiments are: stable oil price and economic data supporting a possible beginning of rate cut cycle. The weekly candle still shows bullish nature of the move. As observed in the previous blogs, this appears to be a new trend emerging.

A few observations from the weekly charts are:

1. The index moved in a range of 472 points viz. between 21329 and 21801
   
2. The oscillators of different time frames are turning positive
   
3. Option open interest to drive the direction of the market
   

Expected scenarios for the ensuing week

1. Index appear to have moved to the stage 3 of a new trend.
   
2. Since the Index continues to post new ATHs, there are no reference points on the upside. Only projected levels based on studies can be taken for references
   

Additional interesting observations

• Another week of strong bull candle with a closing near the top
  
• Index may find supports at 21650, 21540, 21400 the index could face resistances at 21840, 21960, 22020
  
• Though the earlier gaps got covered during the down move, and new gaps have been created around the same levels.
  
• 18972-19079 (29th July 23) Covered ** Created again as 18990-19129
  
• 19189-19246 (3rd July 23) Covered ** Created again as 19144-19247
  
• 19443-19651 (15th Nov 23)
  
• 19889-19976 (28th Nov 23)
  
• 20133-20194 (29th Nov 23)
  
• 20267-20601 (04th Dec 23)
  
• 20926-21116 (14th Dec 23)
  
• Though there is no immediate risk seen, it is scary to see such huge gaps without consolidation. The return journey may also be harsh.
  
• [/list
  Final Note
  
• The Index has stayed well above the long-term trend line and the 200 DMA at 19142 and stays above 55 DMA at 20133
  
• Index has been posting gains for the past 9 consecutive weeks with one exception. The Index continues to post higher highs and higher lows, which is indicative of the continuation positive bias
  
• a few occasions in the past shows clear signs of a new trend emerging after such sharp gains (Refer june 22 & Mar 23)
  
• This study suggests approximately 3150-3300 points from the start to the top by that calculation the primary target level for this move is close to 22220. Does this sound similar to the peak of 18887 seen in Nov 22, 19991 in July 23 and 20222 in Sep 23. Odds favors such a move given the present mood in the market and the Fib projection also points to this region.
  
• This time the fault lines are at 21400 and 22850
  
• Expect a consolidation in the above range
  
• It would be interesting to watch the scenario as it unfolds
  
• Observations favoring further upside
  
• Second monthly stronger bull candle with a closing near the highs
  
• No distinct reversal signal seen yet
  
• Observations on the flip side
  
• Possible sharp moves orchestrated by big players to drive away the small investors or for testing the depth of the market
  
• The rise has been too fast and too sharp and there could be profit booking
  
• A word of caution
  
• Though the geopolitical scenarios and the market outlook may be different, the past two years has seen a slowdown phase during January. It is prudent to be vigilant and protect the profits.
  #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.