NIFTY-Weekly Outlook-Venkat's Blog

22 lug 2023The past week saw a strong up move once it crossed 19600. A new ATP has been made at 19991, just short of the 20k mark. However, Friday’s saw a sharp down move to make the Index settle at 19745. The Index still made a bullish candle. It remains to be seen if this fall is account of profit booking or a reversal.

A few observations from the weekly charts are:

• The index moved in a range of 429 points viz. between 19562 and 19991
  
• The oscillators of different time frames are showing mixed signals
  
• Monthly closing related Option open interest to drive the direction of the market
  

Expected scenarios for the ensuing week:

• The Index has taken sufficient time to consolidate between 19500 &19700 before breaking out which is considered a good sign
  
• Index may find supports at 19570, 19440,19320 and the index could face resistances at multiple levels19860,19970 and 20130
  

Additional interesting observations

• The Index is entering positive territory and may remain positive till we see a weekly close below 19300
  
• There has been a few Gaps created in this bull run
  
• 18818-18908 (28th Jun 23) far off for now
  
• 18972-19079 (29th July 23) far off for now
  
• 19189-19246 (3rd July 23) far off for now
  

A word of caution

• Be aware of the Gaps made during the up move
  
• Index is moving in an ascending channel having a depth of about 700 points. The top of the channel at 20020 and the lower end at 19320 and median at 19670
  
• Currently the Index is above the mid-point of the channel
  
• Post Covid 19 crash in Mar 20, we have seen positive candles in the month of July. The story so far has been showing similar trends continuing. Yet, It remains to be seen if this would continue in this year as well when actual closing happens by the end of the month which happens in the current week
  
• The Index has achieved a fresh mile stone and the formation in daily charts appear that of a flag and a W formation in the weekly, the target could be another 600-700 points.
  
• Index still has an unfinished agenda of scaling 20200 and then 20500. When and How is the question
  
• A consolidation would prove the strength of the move
  
• A daily close below 19520 would see the Index drift towards 19230
  
• Need to remain vigilant as drag can be on both sides
  
• There could be profit booking ahead of FED during the current week.
  
• Expected to consolidate remain in the range of 19520-19920 and any close outside the range requires re-assessment of risk
  
• Apparently there appears two distinct fault lines-the lower one at 19520 an the top one at 19920. There are chances of 200 points move if either of this is breached on a daily closing basis.
  

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