Over the past five sessions, the market has been on a largely upward trajectory except for a day of consolidation in the midst of keeping the general trend sharp.
The trading range also widened on expected lines. nifty In the previous week, there was volatility in the range of 613.70 against 405.75 points. Taking its support higher, the index has opened up some upside space for itself. The market finally ended with a net gain of 468.55 points on a weekly basis, while forming a higher top and a higher bottom on the chart.
The last five trading days are significant from a technical point of view. Nifty has avoided a breach of this crucial support by virtue of closing after holding at the 100-week MA level. The 100-week MA is currently located at 15454, making it an important support for Nifty.
Importantly, Nifty has also managed to cross the 15700 level. The support which he violated on his way. In addition, it has also managed to fill the gap created between the 15900-16200 region. This also translates into support for the Nifty to move up again between 15950-16000 levels. The instability also calmed down; India VIX fell 13.44% to 18.40.
The coming week may see a steady start; The 16300 and 16480 levels are likely to act as resistance points. Support comes at the 16160 and 15950 levels. The trading range may remain wider than normal for the coming week. weekly RSI is 46.36; It remains neutral and shows no divergence towards the price.
The weekly MACD is bearish and trades below the signal line. However, the narrow gap in the histogram indicates a loss of momentum during a downward move. A strong white body emerged on the candles; This showed a strong directional consensus from market participants to the upside.
Pattern analysis of the weekly chart shows that Nifty closed at the 100-Week MA level; Moreover, the index has also crawled above the crucial 15700 level, which it violated on its way out. In the process, Nifty has elevated its most immediate support at this point.
Weekly options data shows the 16200 level saw the highest Branch OI is being added on Friday. However, looking at the historical weekly options data, maximum Put OI exists at 16200. This means that in case of any consolidation, 16000 is likely to act as strong support for the market.
Highest Call OI is currently placed at 16200. This means that for the coming week, Nifty price will be crucial to watch against the 16200 level. If Nifty remains above 16200 for a long time, then it can get a little more strength. However, if it breaks below 16200, we could see the market consolidating in a certain range for some time.
In our look at the Relative Rotation Graph®, we compared various sectors against the CNX 500 (Nifty 500 Index), which represents over 95% of the free float market cap of all stocks listed.
Analysis of Relative Rotation Graphs (RRG) shows that the Nifty Realty Index and Nifty Services Index have turned inside the correction. This indicates that both these indices may end their phase of relatively underperforming, and may soon start improving their relative performance against the broader Nifty 500 index.
Apart from this, the Nifty Financial Services Index is also in the improving quadrant. We have Nifty Auto, FMCG, Consumption and Nifty Bank indices inside the major quadrants. All of these groups are likely to continue to outperform the broader markets.
Nifty Infrastructure Index has slipped inside a weak quadrant. Besides, the PSE and Pharma indices are also in the weak quadrant. Metal The index continues to make significant strides inside the lagging quadrant. Nifty Midcap and Commodity indices are also looking weak inside the lagging quadrant. Media and IT indices are also inside the lagging quadrant, but they appear to be improving their relative momentum against the broader markets.
Important Note: RRGTM charts show the relative strength and momentum for a group of stocks. In the above chart, they show relative performance against Nifty 500 Index (Broad Market) and should not be used as direct buy or sell signals.