NIFTY WEEKLY OUTLOOK FOR 2 JANUARY TO 6 JANUARY 2023

WEEKLY RESISTANCE FOR NIFTY: 18275, 18375, 18500

PIVOT POINT: 18150

WEEKLY SUPPORT FOR NIFTY:  17950, 17825, 17700

WEEKLY CHART FOR NIFTY

The destructive session on December 23, 2022 was followed by a muted open on the morning of December 26, 2022 as there were no global triggers. Nervousness lingered for the first hour as we challenged Friday's low to break into territory below 17800. Luckily, seeing this opportunity to re-enter this market after 2-3 days of a significant correction, the mighty bulls came to the rescue. Most of the depressed areas rallied strongly, led by the heavyweight banking conglomerates. Buying continued to accelerate throughout the day to eventually retake the 18,000 level on a closing basis. The smart rebound of December 26, 2022 was followed by a tentative start on December 27, 2022 despite favorable global signals. After the first hour, the cops picked it up from where they left off on Monday. Buying resumed in some of the heavyweights and then metals stocks joined the hands thanks to the easing of COVID restrictions in China. During the remainder of the session we saw steady bullishness to retake the 18100 level on a closing basis, adding over six tenths of a percent to the Bulls Kitty. We had a sluggish start to the December 28, 2022 session, factoring in slightly nervous global signals. This was followed by a gradual recovery in the first hour itself. However, momentum was clearly lacking as the session progressed. Nifty continued to fluctuate in a range of just 90 points which is certainly very narrow for index trading at 18000 levels. Finally, we ended the session almost around the last few days. Similar to the December 28, 2022 session, global markets appeared fearful on the morning of December 29, 2022 and in line with this, Nifty began the monthly expiry session on Thursday, December 29, 2022 on a negative note. Then after testing the levels around 18000; Price action in the first half was very range bound as Nifty circled in a 60 to 70 point range. However, as we entered the penultimate hour, buying momentum accelerated the pace in some of the heavyweight pockets (mainly banks), lifting overall sentiment to close just below 18200 with gains of 0.38%. Markets took profits on the last trading day of the calendar year, losing nearly half a percent. The tone was muted for most of the day, however, a sharp cut in the last half hour pushed the bulls behind. Indian benchmarks fluctuated between green and red during the morning session as investors positioned themselves around the neutral lines on mixed global clues. However, the sale of butts at the end dragged the markets lower to close in the red. On the global front, Asian markets are mostly trading in the green despite ongoing inflation concerns and rising COVID-19 cases in China. European markets traded lower and investors remained cautious as a brutal year marred by Russia's war in Ukraine, rising inflation and associated monetary tightening comes to an end. On December 30, 2022, Indian equity indices ended the session in the red. The Sensex closed below 60900 while the Nifty settled below 18200. The Sensex fell 293 points to 60840 while the Nifty fell 85 points to 18105.

NIFTY BANKNIFTY: STRONG SUPPORT& STRONG RESISTANCE LEVEL

The key resistance level for Nifty is 18350 and on the downside 18000 can act as a strong support. The key resistance and support levels for Bank Nifty are 43600 and 42400, respectively.

TECHNICALLY SPEAKING

The index has formed a bullish harami pattern on the weekly chart, indicating a bullish reversal. Also, the index closed above its 50-week exponential moving average. The momentum indicator RSI (14) on the weekly chart is in a bearish crossover. The 50 EMA and 200 DMA are in the bullish crossover. The short-term trend is likely to remain bullish as long as it stays above 17,800 on a closing basis. On the upper end, resistance is seen at 18,350. A decisive move above 18,350 could trigger another rally towards 18500/18800. On the other hand, a decisive drop below 17,800 could weaken the trend. Nifty formed a bearish dark cloud cover pattern on the daily charts. However, on the weekly charts, Nifty closed positive (up 1.68%) after a three-week decline. 17775 is now becoming an important support level to track. On the upside, the 18255-18275 band remains a key resistance. In calendar 2022, Nifty gained 4.3% while the month of December ended down 3.5%.