Weekly Technical View
Weekly Technical View on NIFTY, BANK NIFTY, USD/INR, GOLD , CRUDE, CRYPTO
NIFTY : - The past week witnessed an attempt to break from the top of the downward sloping channel. The close at 17945 is at the cusp of the channel top. The Index appears to be consolidating at a higher range. However, it lacks the required momentum to stay above 18K in the first attempt after the deep sell-off happened during the previous month.
A few observations from the weekly charts are:
- Weekly charts suggest that
- The index moved in a range of 415 points viz. between 17719 and 18134
- The oscillators are showing mixed signals
- Monthly expiry due during the week and Option OI to drive the market direction
- Expected scenarios for the ensuing week
- Index managed to post higher highs and higher lows which is seen as positive
- Additionally, if manages a daily close above 18040, there are chances that it scales previous month’s peak of 18250
- For the ensuing week, the index may find supports at 17850, 17740, 17620 and the index could face resistances at, 18050, 18140, 18250
- Expected to remain in the range of 17620-18250 and any close outside the range requires re-assessment of risk
- Additional interesting observations
- The base seems to have shifted to 17600 which is the long term trend line support
- However, there would be series of hurdles at 18080,18150, 18250
- DOW appears to be caught in a trading range due to uncertainties on the FED rate decision and inflation outlook.
- For now, expect the range of 33500-34300 to continue
- Any close outside the range would trigger 300-400 points move in the direction of break
- Final Note
- The index seems to have weathered the storm due to panic selling of major corporate group stocks and the dust appears to be settling down
- Interestingly the Index has managed one attempt to cross the downward sloping channel from the top. The weekly close is around the trend line
- From the daily charts it appears that the Index is moving in a downward sloping channel with base support at 17270 and top at 17930
- Till either of this is breached we may see a consolidation
- FIIs have turned net moderate buyers and the DIIs also moderate buyers
- The ensuing week has potential for making good the losses sustained in the last week of Jan 23 as we do not see major risk events scheduled for the week
- Most likely scenario could be a range of 17620-18250
- We need to see a daily close above 18250 for further gains towards 18520
- Monthly option expiry is likely to trigger choppy moves on either side
- The below piece of information is being highlighted in our previous blogs starting Dec 22. We intend to keep this tail piece even at the cost of repetition for the sake of quick reference
- If we take the Fib retracements so far the correction has been 1283 points. The Annual gain has been 3704 points from 15183 to 18887. One third correction would fall at 17666 and a 50% correction would mean 17035
Bank Nifty: - The Bank Nifty moved in a range of 1096 points Viz. between 40882 & 41979 and made a bearish candle. The scenario for now appears to be balanced. The Bank Nifty appears to be having trouble in crossing the 42k zone convincingly. Bank Nifty is continuing to move in the downward sloping channel with Bottom support at 39200 and top resistance at 41900 and the mean at 40520. While the index may see selling pressure at 41900, there are fair chances that this level is taken-off and the Bank Nifty attempts next strong resistance level of 42700. A close below 40500 would make the Index drift towards 39500. With Monthly expiry due during the week and Monthly closing candle for the next week expect choppy moves on either side for another couple of weeks. A breach and close above 42200 would trigger stops and the Bank Nifty might see a spike towards 42700. Expected range for Bank Nifty is 39350-42450.A daily close outside the broader range indicated above would require re-evaluation. In any case the future direction would be clear by the end of this week.
USDINR : - For the fourth consecutive week the pair saw constant buying interest and posted higher highs and higher lows. However, the size of the move is narrowing viz. between 82.49 & 82.99. From Oct 2022 we have seen this as the third attempt to cross 83 mark. The question is whether it will breach this time. While we may expect the supply to improve closer to 83 mark, we cannot rule out the chances of one spike to 83.50-83.70 and then cool-off. Alternatively, if the 83 holds for a couple of sessions more we may see the reversal towards 81.80. Till we see a daily close below 81.80, we can assume that the pair would continue the consolidation phase between 81.80 and 83.00. Most likely scenario would be a consolidation between 81.80 and 82.80. There could be choppy moves within this range. A close outside this range requires re-assessment of risk/direction and target.
A few more observations:
- The currency is attempting the top of long term trend line
- Presently the correlation between DXY and USDINR is not active and the Dollar Index-DXY is likely to hover in the familiar range of 101-105
- The raising upward channel indicate the broader range of 80.10-83.10
- The 82.75-83.25(with error adjustments) zone is the Fib projection of July 2011 to July 2013. Hence, the importance. It is a million-dollar question whether this zone will be breached. If breached, we may see another out of spike towards 85.70
- Candle formation does not indicate immediate risk. Yet the impact on businesses would be immense if it does happen
- The increased volatility and wild swings likely to continue
Gold :- As expected there has been continued selling pressure on every attempt of higher levels. Friday’s pull back from 1820 to close at 1837 suggest that there could be some relief for the precious metal to attempt 1880 levels. A failure to close above 1845 would invite selling pressure again which might see the metal drift towards 1810. We are back to the earlier range of 1810-1910. With 1850 acting as Pivot.
Crypto :- Past week saw buying interest and the crypto assets managed to break above July 22 top. The reactive pull backs are likely to be supported by fresh buying interest. Technically there are fair chances for an appreciation towards June 2022 highs. The remaining weeks of Feb are crucial for the Crypto assets to hold on to the gains and move higher failing which we would see renewed attack. For now, the scenario seems to be tilted towards buying by investors.
Crude :- Crude prices continue to remain in a narrow range. As it could not breach crucial 82-85 range the prices came under pressure. We are witnessing choppy moves between 73 & 80 for the past 4 to 5 weeks. Next few weeks are crucial. We may see a sharp move if the crude manages to close above 83. The Monthly closing candle would provide clues for further direction and target. The range of 75-85 is considered safe and beneficial for revival. Let this range continue for the benefit of growth and peace.