NIFTY WEEKLY OUTLOOK FOR 16 JANUARY TO 20 JANUARY 2023

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WEEKLY RESISTANCE FOR NIFTY: 18000, 18200, 18400

PIVOT POINT: 17800

WEEKLY SUPPORT FOR NIFTY:  17700, 17600, 17500

WEEKLY CHART FOR NIFTY

We started the week on a pleasant note from 09 January 2023 and then extended gains in the initial hours. Around the mid-session, the Nifty hastened towards the 18100 mark. However, a small bout of profit booking at the start of the second half dragged index back to 18000. Fortunately, the buying resumed in the final hour to reclaim 18100 on a closing basis. The Tuesday 10 January 2023 morning opening was on a muted note but disappointing set of numbers from TCS had already dented the sentiments within this heavyweight space. This had a rub off effect on other major pockets as well, which resulted in a massive selling pressure right from the word go. As the day progressed, the selling augmented in RELIANCE and even in most of the banking counters. As a result of this, we pared down all Monday’s gains and Nifty was back to 17900 by shedding slightly over a percent from previous close. We had a sluggish start for the Wednesday 11 January 2023 in line with SGX Nifty. In the initial trade, the nervousness dragged our benchmark lower to almost test the 17800. However, the banking space provided the much needed helping hand at lower levels along with few heavyweights IT names. We did see complete recovery in the first half and in fact for a brief period, Nifty traded in the positive terrain. However, lack of follow up buying at higher levels poured water on this recovery. Eventually, Nifty ended the session with negligible loss a tad below 17900. Our markets started the Thursday 12 January 2023 session marginally in the green despite SGX was indicating a decent gap up. Without wasting much of a time, the bears resumed their work at office and hence, we drifted lower as the day progressed. In this course of action, Nifty not only sneaked below Wednesday’s low but also went on to challenge the recent swing low of 17774. Fortunately, the expiry factor played out well around low and as a result, the oversold market gave a modest recovery in the latter half to minimize the damage to a great extent. India equities were higher at the close on Friday 13 January 2023, Nifty 50 gained 0.55%, while the Sensex index gained 0.51%. Sensex ended with a gain of 300 points after a three-day losing streak to close above 60000, at 60261. Nifty also added almost 100 points to end at 17956. US CPI data for the month of December fell to 6.5%, which is leading to expectation of less aggressive interest rate hikes by US Fed going ahead. On the domestic front, CPI inflation further eased to 5.72% in Dec, while IIP growth improved to 7.1% in Nov’22.

NIFTY BANKNIFTY: STRONG SUPPORT& STRONG RESISTANCE LEVEL

The resistance is visible at 18200, whereas on the lower end, support is visible at 17700. Any breakout in either direction would create a directional trend in the market.

TECHNICALLY SPEAKING

The Nifty, in the week gone by, witnessed sharp swings in both the directions & ultimately posted a positive weekly close. It has formed a Doji pattern on the weekly chart. For the last few weeks, the index is trading above the 20 WMA, which has resulted in a Triangle pattern formation on the daily chart. After a recent base formation near the lower end of the pattern, the Nifty witnessed smart recovery on January 13.  Technically, on weekly charts the Nifty has formed a long legged Doji candlestick formation. For the next few trading sessions, the 100-day SMA (Simple Moving Average) or 17800 would act as sacrosanct support levels. A pullback formation above the same could drive the index to 20-day SMA or 18100. Further upside may also continue which could lift the index till 18,200. On the other hand, a fresh round of selling is possible only after the dismissal of 17,800 and below the same, the index could slip till 17800-17,600. On the weekly chart, the index has formed a doji-like pattern, which signifies indecision. However, the Nifty sustained below the 50 EMA on the daily timeframe, confirming an ongoing bearish trend.