NIFTY WEEKLY REPORT & VIEW FOR NEXT WEEK 18 MAY TO 22 MAY 2020

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WEEKLY RESISTANCE FOR NIFTY: 9300, 9500,9700
PIVOT POINT: 9000

WEEKLY SUPPORT FOR NIFTY:  8700, 8500, 8300
WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 9100, 9200, 9300
PIVOT POINT: 8950

DAILY SUPPORT FOR NIFTY:  7900, 7800, 7700
DAILY CHART FOR NIFTY

Our markets started trading for the week on a positive note around 9350. The up move continued in the first half an hour and Nifty almost tested the resistance of 9450. However, the banking space corrected and underperformed throughout the day which dragged the Nifty index too and it ended with marginal loss. Post the correction from its high on Monday, our markets opened marginally negative on Tuesday. The index traded with a negative bias till noon as the Banking and Financial stocks corrected. The index heavyweight Reliance Industries too corrected sharply which led to a dip in Nifty towards 9040. However, in the later half, the banking space recouped its intraday losses and hence, Nifty too recovered from the lows to end the day tad below the 9200 mark. Our markets opened gap up in Wednesday’s session post the announcement of the Prime Minister’s stimulus package. However, it gave up some of the gains in the first half and hour and then consolidated for rest of the session within the range of 9350-9430. Nifty ultimately ended the day with gains of over 2 %at 9384. The indices opened gap down in Thursday’s session owing to the negative cues from the global markets. The index remained under pressure throughout the day to end with a loss of over 2.5%. Indices erased most of the losses ahead of Finance Minister Nirmala Sitharaman’s press conference at 4 pm on Friday. It is expected that the finance minister may announce relief package for agriculture and aviation sectors. nifty closed the week at 9133

NIFTY: A STRONG SUPPORT WILL BE @ 8800; STRONG RESISTANCE LEVEL SEEN @9800

It looks like 9000 to 9700 on the Nifty will be the range. It will depend on how global markets are because in the very short period, the markets will find support and it will find upward momentum. Having said that, clearly you have to keep in mind that global markets have rallied quite significantly from the lows of March and it is quite possible that we might see some corrections in the global market as well and it depends on how sharp and deep those corrections would be. If there are sharp corrections, the floor of 9000 could pretty much not only be tested but also broken as well.

 TECHNICALLY SPEAKING.

Post the announcement of the Covid relief package by the Prime Minister, our markets rallied higher on Wednesday. However, in last two trading sessions the global markets have been under pressure and the effect of the same was seen in our markets. Nifty traded with a negative bias to end tad below 9150. It seems that our market is not yet out of the consolidation phase as there was no follow up buying post Wednesday’s upmove. In the recent past, Nifty has traded in a range and there is no sign of a directional move yet. As far as levels are concerned, the support end of this consolidation is in the range of 8800-9000. It would be important to watch how the index behaves around this support as a breach of the same could lead to a resumption of correction. On the flipside, 9500 followed by 9700 are the immediate resistances for Nifty. We have seen a consolidation phase in the index and the Nifty approached the support end of the range. Thus, a pullback move was seen in the later half which is indeed a good sign for near term. In our recent reports, we have been mentioning about 9000 being an important support for the index. recovery from the lows which coincide with the ‘200 SMA’ on the chart still provides a hope for the market. In fact, in such consolidation phase, buying near the support and selling near the resistance is an apt strategy which provides good risk reward ratio for swing traders. Thus, looking at current scenario, traders are advised to avoid taking contra call and look for stock specific buying opportunities from a short term trading perspective. The range of 9000-8800 is the support range for this consolidation phase whereas resistance is seen around 9600. Directional move could be seen only post a breakout beyond the above mentioned range .

Although, it appears to be a sharp cut when compared to previous week's close, the overall trading action during the week was muted. In fact, the last couple of trading sessions' price action was extremely lethargic and the market completely looked directionless. Neither Bulls had the strength to overcome the sturdy wall of 9600-9700 nor Bears were dominant enough to violate the 9100 mark. Hence, for the coming week, 9500 to 9100 remains to be an immediate range. Only a sustainable breakout on either side would confirm the next path of action. Traders holding existing longs should maintain their positions as long as 9100 is successfully defended. Although we are completely not out of the woods when it comes to Coronavirus Pandemic, we remain hopeful till the time key support.