The market has remained in an upward trending trajectory for the past five sessions barring any consolidation. This kept the general trend bullish.
On the expected lines, the trading range also increased. The NiftyThe index oscillated and moved in a range of 613.70 points, compared to 405.75 points the week before. Although the index is shifting its supports higher the upside has been possible. The market ended the week with net gains totaling 468.55 points, while also forming a higher top-bottom ratio on charts.
Technically, the last five trading days are significant. The Nifty is now at the 100-Week MA and has not fallen below this crucial support. The 100-Week MA currently stands at 15454 and is an important support for the Nifty at close ranges.
The Nifty has moved beyond the 15700 level, which was the support it had violated while going down. The gap that existed between the 15900-16200 zones has been filled by the Nifty. This means that support for Nifty is moving higher again between 15950-16000 levels. Volatility has also declined; India VIX fell by 13.44% and 18.40.
The week ahead may see a stable start. Resistance points at 16300 and 16480 could be used to keep the momentum going. The 16160 and the 15950 levels are support levels. The trading range for this week could be wider than usual. The weekly RSI46.36, it remains neutral and doesn’t show any divergence in relation to the price.
The weekly MACD is bearish, and trades below that signal line. The histogram’s narrowing gap suggests that momentum has been lost during down moves. The candles showed a strong white body that emerged from the candles. This was indicative of a strong consensus among market participants for the upside.
The weekly chart pattern analysis shows that Nifty has maintained the 100-Week MA levels on closing basis. It also has crawled over the critical 15700 levels, which it had breached while going down. Nifty has moved its immediate support higher in this process.
Weekly options data show that the 16200 level has seen the highest levels PutOI being added on Friday. The historical weekly options data shows that the maximum OI is 16200. 16000 will likely provide strong support to the market in the event that there is any consolidation.
At 16200, the highest Call OI currently is. This means that for the coming week, Nifty’s price action against the 16200 levels will be important to watch. The Nifty may stay above 16200 for a while, but if it falls below 16200, we might see markets consolidating in a narrow range for a while.
In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks listed.
Relative Rotation Graphs Analysis (RRG) shows that the Nifty Realty Index and Nifty Services index has rolled inside the improving . This means that both indices are likely to end their period of relative underperformance and will soon be able to perform better against the Nifty500.
Nifty Financial services index is also within the improving quadrant. Nifty Auto, FMCG and Consumption are the four leading sectors. These groups will continue to outperform the wider markets.
The Nifty Infrastructure Index is now in the weakening quarter. Additionally, the PSE Index as well as the Pharma Index are both in the weakening quarter. The MetalIndex continues its impressive progress inside the lagging quarter. The Commodities and Nifty Midcap are also found languishing in the lagging quarter. Although the Media and IT indexes are still in the lagging quadrant, they seem to be improving relative momentum against the wider markets.
Important Note: RRGTM Charts show relative strength and momentum of a group stock. These charts show relative performance against NIFTY500 Index Broader Markets and should not serve as buy or sell signals.