NIFTY-Weekly Outlook-Venkat's Blog

The past week saw a muted action during the first four sessions. The euphoria of soft landing on the moon triggered a spike past 19460 hurdle and saw a high of 19584, but only to be sold-off back towards the lows of the week. The selling pressure is expected to continue till we see a spike above 19520-640 range on a closing basis. The Index made fifth bearish candle on weekly chart which is longer than usual.

A few observations from the weekly charts are:

• The index moved in a range of 335 points viz. between 19584 and 19229
  
• The oscillators of different time frames are showing negative signals
  
• Monthly candle closing and Option open interest to drive the direction of the market
  

Expected scenarios for the ensuing week

• The Index closing below the crucial 19520 is a sign of weakness
  
• The index breached the lower end of the channel and going forward the channel trendline would be a barrier which is around 19620
  

Additional interesting observations

• Presently, the outlook appears negative. However, the crucial support at 19200 is holding for now
  
• The support around 19200-250 range is gaining importance as this level is tested thrice during the last few weeks of weeks.
  
• Index may find supports at 19175, 19040, 19920 and the index could face resistances at multiple levels19330,19460, 19580 and 19670
  
• 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) * being attempted
  

Final Note

• The Index has stayed well above the long-term trend line and the 200 DMA at 18345, however, the Index moving back and forth of 55 DMA at 19310 is a matter of concern
  
• In the weekly charts the Index has broken the lower end ascending channel
  
• Whereas, in the daily charts we observe a descending channel with 400 points range with range from 18970-19370
  
• Ensuing week is crucial for a favorable monthly closing candle
  
• The line of control has shifted down to 19570 for the Bulls to regain the power and it needs to be in a quick with sharp move else we may see second bout of sell-off
  
• Index made fifth bearish weekly candle
  
• The is scenario currently tilted in favor of Bears and is attempting to break the crucial support zone of 19250 for taking the Index below 19K. The significance of 19180-250 zone comes from the Fib retracements of the move viz. 16870 to 19990. And also, the Lows of July 23 and High of June 23
  
• A close below 19420 suggest that the Index would Index drift towards 19030
  
• Need to remain vigilant as drag can be on both sides and increased volatility due to Monthly closing candle. A monthly close below 19200 would signify a bearish engulfing pattern and the next thing to look for would be 18800.
  
• Expected to consolidate remain in the range of 19030-19630 and any close outside the range requires re-assessment of risk
  
• August series Option exposure build up has kept the Index lower. It remains to be seen the bets for new Sept series
  
• Apparently there appears two distinct fault lines-the lower one at 19170 and the top one at 19470. There are chances of 200 points move if either of this is breached on a daily closing basis.
  

#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.