NIFTY WEEKLY PREDICTION & CHARTS 1 APRIL TO 5 APRIL 2019

WEEKLY RESISTANCE FOR NIFTY: 11750, 11850, 11950

 PIVOT POINT: 11500

WEEKLY SUPPORT FOR NIFTY:  11400, 11300, 11200

WEEKLY CHART FOR NIFTY 

DAILY RESISTANCE FOR NIFTY: 11650, 11700, 11800
PIVOT POINT: 11500

DAILY SUPPORT FOR NIFTY:  11450, 11400, 11350

DAILY CHART FOR NIFTY 

Nifty did extremely well this week and it continues to enjoy its recent Bull Run. Although, it has come off a bit from the high, a race to reach the magical figure of 12000 is very much on.

The week started with a bang on Monday as we saw a gap up opening first which was then followed by a massive intraday rally; setting the tone for the rest of the week. Following days did not disappoint at all, in fact there was strong optimism seen throughout to post massive intra-week rally. With this, Nifty managed to clock biggest weekly gains in last four months. The major charioteer for this mesmerizing rally was none other than the heavyweight banking index. What a stellar move we witnessed throughout the week to register fresh highs in the process. Eventually both indices saw some mild profit booking towards the fag end of the week and it was very much evident also after seeing such relentless rally.

Trading for the week in our markets started with a decent gap down, catching some of the momentum traders on a wrong foot. As we generally see an ‘open high’ kind of scenario in such developments, we started losing further ground right from the word go. Fortunately, the selling exhausted in the latter half and we saw mild bounce back to defend the 11350 mark on a closing basis. Tuesday was a splendid day for our markets in the midst of a global uncertainty. Traders started fearing about global slowdown and hence, global markets had a terrible day on Monday. We also had a rub off effect of it; but it didn’t last too long. Despite SGX Nifty indicating a flat start yesterday, we kick started higher and post the initial consolidation, there was complete gush seen in the latter half of the day to eventually conclude the spectacular day with gains over a percent. Tuesday’s smart rally was followed by a decent bump up at the opening Wednesday. Throughout the first half, index consolidated well above the 11500 mark; however, post the midsession, there was sudden nosedive seen across the board. The selling pressure was so intense; a valiant attempt to reclaim 11500 got sold into. Eventually, a volatile day ahead of the derivatives expiry ended with a cut of three tenths of a percent. Thursday expiry day clearly belonged to the might bulls after Wednesday’s mild hiccup. Yesterday morning, despite SGX Nifty indicating a sluggish start, we managed to kick off marginally higher and then accelerated as the day progressed. It was very much unlike normal expiry day as there was no volatility seen neither in the first half nor towards the fag end. In fact, we had a good steady trended day to register highest closing in last six months. Nifty ended higher on the last trading day of the current financial year 2018-19 with Nifty finished above 11600 level.

NIFTY VIEW FOR COMING WEEK  1APRIL TO 5 APRIL 2019

This month’s rally, which has pushed up the nifty by over 800 points, is in sharp contrast to Indian markets’ sharp underperformance in the first two months of this year as compared to other global market. As per the analysis this month’s rally to be a pre-election moves in anticipation of a stable government at the Centre. Some opinion polls give an edge to the NDA government in the seven-phase Lok Sabha elections that start from April 11.  Foreign institutional investor’s investment, dollars sent the rupee to its highest level, Global investors exposure also supported the nifty.

Market looks a bit tired now and it is quite evident to have such kind of exhaustion after rallying more than 7% in such a short span. We have been indicating about such possible consolidation; however, we continue to remain upbeat on the market and advice against adopting a contrarian approach. As far as levels are concerned, 11500 followed by 11400 would now be seen as immediate supports; whereas on the upside, 11800 and 11900 are the next levels to watch out for. The kind of intraday moves and the close we are witnessing, it’s a typical behavior of any healthy up move. Although, it appears that we have entered an overbought zone, intraday declines are getting bought into and then we continue to see such gravity defying moves. In this scenario, it’s always advisable not to have a contrarian approach; rather be with the flow and keep riding the tide. The kind of price action we witnessed Friday is a typical behavior of the market that happens after a steep rally and after reaching key junctions in a short span. If we just look at the daily chart, Wednesday high coincides with the previous swing high on September 14, 2018. Since, index was extremely overbought, we just saw natural reaction i.e. some profit booking. Get ready for some consolidation or minor profit booking before index starts marching towards all-time highs. However, having said that, we reiterate that traders should refrain from going against the strong optimism and hence, one should avoid going short at this point of time.

 TECHNICALLY SPEAKING.

Let’s dig into a bit of technical now. In our sense, the stage was set for this kind of move when Nifty convincingly surpassed 11600. We were vocal about this rally getting extended towards 11700 – 11900, which was the higher end of the ‘Megaphone’ pattern. Index has reached this junction and in fact due to strong exuberance, Nifty extended its march towards the 12000 mark. Now, we are at a kissing distance from this figure and it’s a matter of time, index would actually see this number. But, the point is, will there be some exhaustion seen or index would continue heading towards alltime highs.

Honestly speaking, we are at crucial technical ratios and considering the pace of the move, the risk-reward for fresh trader has gone for a toss now. In our sense, some kind of consolidation would now be seen for a while before unfolding the next leg of the rally. By no means, one should go short, rather it’s time to be selective when it comes to individual stocks and should be done with a proper money management. On the higher side, 11800 followed by 11900 would be the immediate levels to watch out for and on the downside, 11500 and 11400 should be seen as important supports in the forthcoming week.