NIFTY WEEKLY PREDICTION & NIFTY TIPS FOR 26 OCT TO 30 OCT 2020

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WEEKLY RESISTANCE FOR NIFTY: 12000, 12100,12200

PIVOT POINT: 11900

WEEKLY SUPPORT FOR NIFTY:  11800, 11700, 11600

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 12000, 12050,12100

PIVOT POINT: 11930

DAILY SUPPORT FOR NIFTY:  11900, 11850, 11800

DAILY CHART FOR NIFTY

The Asian markets were trading with a positive bias on Monday morning which led to an optimistic sentiment and hence, our markets too started the week with a gap up. Nifty then consolidated within a range throughout the day and ended with gains of almost a percent at 11873. On Tuesday Nifty opened on a flat note and moved higher till noon up to 11950. However, the index then gave up the intraday gains and consolidated within a range to end the day tad below 11900. Wednesday our markets started the session with a gap up opening, courtesy to the banking stocks which continued with its positive momentum. The midcaps too joined the upmove and thus, it looked that the index will take out the 12000 mark easily to kick start the next leg of upmove. However, in the later half, the index suddenly nosedived and within no time, Nifty sneaked below 11800 from 12000 mark. But it was not over yet, the index showed a V-shaped recovery in the last hour and ended this highly volatile session well above 11900. The global cues were marginally negative in the Thursday morning and in line with that, Nifty started the session below 11900. The index oscillated within a narrow range throughout the session and ended the weekly expiry day tad below 11900 mark. Friday Sensex gained 127 points to settle at 40686 levels while Nifty ended at 11930, up 34 points. 

NIFTY: A STRONG SUPPORT WILL BE @ 11700; STRONG RESISTANCE LEVEL SEEN @12200

If we observe the chart of the Nifty, it seems to be poised for a breakout from the recent consolidation phase. On looking at the charts, it seems to be a high probability of the index breaking in upward direction, but traders are advised to wait for a confirmation to place aggressive bets in the midcaps. As far as Nifty levels are concerned, 12000-12200 continues to be immediate resistance zone and the next leg of upmove would be seen only on a move beyond the same. So traders are advised to keep a tab on the both the indices as a breakout in both the indices simultaneously should lead to a good upmove in the broader markets. On the flipside, 11700 has become a sacrosanct and if the index breaks that, then it could result into profit booking in the market.

TECHNICALLY SPEAKING

This week’s price action can be divided into two parts where the first half was more of a consolidation with no major movement and the latter one brought some volatility in the market. We managed to clock the psychological mark of 12000 but failed to sustain there. In fact, due to sudden sell off in global markets on Thursday on the fears of a second wave of coronavirus hitting the major European countries, we witnessed a sharp decline in our markets. Fortunately, there was no follow through to this as we saw modest recovery to end the week well above 11700. In the last couple of weeks, we have seen a remarkable recovery in our market after testing the 200-SMA level of 10800. Since the move was extremely swift and markets had a winning streak of 10 straight sessions before Thursday, any uncertainty was likely to trigger profit booking and this is exactly what we have seen. Now, purely looking at charts, this down move should only be interpreted as a pull back towards the recent trend line breakout points. This coincides with the 20-day EMA level of 11600. Hence, all eyes would be on this level in the forthcoming week. However, since the fall has to do with the global uncertainty, it would be important to see how things pan out there and if things worsen, we may see the market correcting further. A close below 11600 would apply brakes on the recent optimism and we may then see some extended correction in the market. Till then there is no reason to worry as we may see markets resuming the strength beyond 11850-11900 to surpass the 12000 mark convincingly. In the week gone by, we witnessed some sectoral shift in the market in the second half. The recent outperforming IT space had seen some decent profit booking along with Reliance; whereas on the other side, the banking which was considered to be a laggard has shown some serious strength to support the market. Hence going ahead, if Nifty has to resume the uptrend, the banking clearly plays a vital role in this. Apart from this, Midcaps are yet to perform and hence, the breakout in this index should bring back some excitement in the traders’ fraternity.