Weekly Technical View

Weekly Technical View on NIFTY, BANK NIFTY, USD/INR, CRUDE, CRYPTO 

NIFTY : - 

Nifty attempted to hold on the gains made in the previous weeks. However, it could not gain higher levels and saw a steady sell-off in the last three sessions. The range is almost the same as that of the previous week. However, it would appear like a bearish engulfing candle on the weekly charts. With 17770-90 region holding for the third consecutive weeks, we may see a consolidation during the ensuing week.

 A few observations from the weekly charts are:

• Weekly charts suggest that 
  • The index moved around 245 points viz. between 17795 and 18251
  • the oscillators are showing negative signals
  • Option OI is expected to drive the market direction
  • 17770-790 continues to be the crucial support zone
• Expected scenarios for the ensuing week
  • Though closed at 17859, the Index is expected to open higher
  • A new Gap between the closing 17859 and 18100 is likely to be created
  • Going forward the 18350-18470 zone, is likely to be a major barrier 
  • For the ensuing week, the index may find supports at 18080, 17960, 17770, and the index could face resistances at 18180, 18270, 18360 & 18480
• Additional interesting observations
  • FIIs and DIIs were net negative 
  • Two possible scenarios
    • Expected range of 17970-18420 or 17770-18360 
    • Any close outside the range of 17770-18420 requires re-assessment of risk
    • US Markets
      • DOW appears to have made a strong base at 32880
      • Friday’s sharp move indicates the possibility of a strong momentum to break the range of 32800 and 33600. 
      • Expect a sharp up move during this week on break of 33600 
  • Final Note
    • The crucial support at 17779 holding for the third consecutive week gives hope for some recovery and even a possible attempt closer to the recent peak.
    • Even at the cost of repetition the following two observations are reference levels for the future 
      • If we take the Fib retracements so far the correction has been 1108 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
      • The Index seem to move 220 points on either side by taking 18020 as Pivot
      • The technical factors indicate a mixed signal
        • The index is caught in a tiny triangle with base at 17800 and top at 18320
        • There are chances for upside if the Index closes above 18360 with sharp move to gather momentum
        • On the contrary, many indicators suggest a fall towards 17320 and the 17035
        • There appears to be a reasonable similarity between the formation during first week of Oct 22 and first week of Jan 23.
        • If we see a sharp reversal this week the formation in the line charts would be a double bottom and we may possibly see an upward trend towards the top of the channel 
      • Very exiting week ahead

Bank Nifty :-

The Bank Nifty lost 797 points and made a bearish candle. Bank Nifty as almost lost previous week’s gains. There is not much of change in the scenario as we see the Index continuing to move in a channel with top at 44600 and lower end at 41800 with a pivot at 43100. This week is crucial to see whether the Bank Nifty holds crucial channel support at 41900-42000 zone for this week. The scenario for now appears to be balanced even as the bears attempt to break the channel support. Bank Nifty is likely to continue in a wider range of 41700-44200 with 43100 as pivot and a breach and close above or below could see the next range of 900 points. For now, 41700 is the crucial level to be watched. And break on a closing basis would mean there is deeper correction ahead towards 40685 and then to 39800. A daily close outside the broader range indicated above would require re-evaluation. 

USD/INR :-

The pair finally broke the narrow range of 81.55-82.92 during last week. As expected possibilities of decent supply or lack of aggressive buying has resulted in the prices easing toward 82.30 which is another crucial level being the trend line support. Only a daily close below 82.30 would suggest further correction towards 81.90. Deeper corrections cannot be expected till we see a close below 82.10. Most likely scenario would be a consolidation between 81.90 and 83.70. A close outside this range requires re-assessment of risk/direction and target. 

A few more observations: 

• narrow range broken 
• We may not see a runaway in DXY. There can be relief rallies.
• Though the DXY attempted cross over of 105+, it got hammered 
• Any spike in DXY need not necessarily impact this pair 
• The raising upward channel indicate the broader range of 80.10-83.10
• The increased volatility and wild swings likely to continue 

Gold :-

The precious metal seems to be making a steady upward trend. As expected the breach above 1840 helped the Precious metal see further gains towards 1870. We can safely assume that the consolidation range got shifted higher with a band of 1820-1920 with 1870 acting as Pivot.

Crypto :-

For the eighth consecutive week the Crypto assets have seen a narrow range consolidation. We are witnessing choppy moves. The unusual calm could be a pre-lude to a sharper move due during the ensuing week. We have been witnessing a sell-off on every spike. Whether the Gap seen in November 2020 spike is to be filled now or later is the major point to ponder and watch for action. Past 8 weeks the range has been a +/- 3-5%. Only a sharp 20% sharp move can possibly help to regain the footing. Likely to take more time to  regain the confidence of the investors.

Crude :-

During the beginning of the previous week the charts were indicating a possible spike towards 91 and possibly 100+ However, we saw cooling down of prices towards 75. There are many uncertainties on the demand and winter worries. Things would look fine as long as the Crude hovers around 75-85 range.  Sounds safe for now as long as we see the crude move in this range of 70-90. Either extremes are likely to hurt the economic activities and the outlook.