NIFTY PREDICTION & CHARTS 25 MARCH TO 29 MARCH'19

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WEEKLY RESISTANCE FOR NIFTY: 11650, 11750, 11850

 PIVOT POINT: 11400

WEEKLY SUPPORT FOR NIFTY:  11300, 11200, 11100

WEEKLY CHART FOR NIFTY 

DAILY RESISTANCE FOR NIFTY: 11600, 11700, 11800

PIVOT POINT: 11425

DAILY SUPPORT FOR NIFTY:  11375, 11300, 11250

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.

The week began with an upside gap, owing to positive cues across the globe. During the initial trade, index extended this lead and in the process, went on to go beyond the psychological mark of 11500. However, post the initial hour, we saw decent profit booking across the broader market to trim major portion of gains. Fortunately, due to modest recovery towards the fag end, index managed to close in the green by adding another three tenths of a percent to Friday’s tally. Monday’s uncertain close was followed by yet another gap up opening in our market on Tuesday, which was very much in line with most of the Asian peers. Subsequently, we saw some consolidation for the major part of the day. However, index picked up a strong momentum in the penultimate hour, leading to an extension of the rally beyond 11500 by adding six tenths of percent. The banking index supported this move as it seems to be enjoying its placement in an uncharted territory. On Wednesday, our markets started the proceedings marginally higher, which was very much in-line with what Nifty has suggested early in the morning. However, we almost had an ‘open-high’ kind of scenario as index failed to surpass the high made in the initial trade. Mostly, it was a day of consolidation within a very slender range to conclude the day with negligible losses. Thursday market was closed due to holi. On Friday market came down nifty closed below 11500 mark .

NIFTY VIEW FOR COMING WEEK 25 MARCH TO 29 MARCH 2019

This month’s rally, which has pushed up the nifty by over 700 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 6% 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, 11400 followed by 11300 would now be seen as immediate supports; whereas on the upside, 11650 and 11750 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. As far as levels are concerned, 11650 followed by 11800 would be seen as immediate hurdles; whereas, on the lower side, 11400 and 11300 are likely to provide decent support in the coming session.

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 11400. What encouraged us is the outperformance of Midcap and small cap basket which started few days prior to this. And then the major driver ‘Banking’ started showing its dominance. Considering all these evidences, 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, 11700 followed by 11900 would be the immediate levels to watch out for and on the downside, 11400 and 11100 should be seen as important supports in the forthcoming week.