NIFTY WEEKLY OUTLOOK FOR 27 FEBRUARY TO 3 MARCH 2023

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WEEKLY RESISTANCE FOR NIFTY: 17550, 17700, 17950

PIVOT POINT: 17450

WEEKLY SUPPORT FOR NIFTY:  17400, 17250, 17100

WEEKLY CHART FOR NIFTY

The Indian equity market had a decent start on 20 February 2023 taking cues from mixed global bourses, wherein the benchmark index started on a mild note and tested the 18000 mark. However, the markets were hesitant to carry the momentum and kept hustling near the psychological mark in the initial hours. By mid-session, the bears showed their presence by tightening their grip, which pared down the gains and dragged Nifty to the lower grounds. Post all the hustles, Nifty settled the day in red with a loss of 0.56 percent, a tad below the 17850 level. We had a positive start to the21 February 2023 session, however, post the strong opening there was a tug of war between the bulls and bears as there were choppy moves on both sides of the trend. Nifty eventually ended the indecisive session with a negligible loss tad above the 17800 levels. On 22 February 2023 The US bourses were under tremendous pressure overnight and taking cues from there our markets started with a big gap down opening. As the day progressed, we witnessed broad-based weakness, and the sell-off extended without any meaningful intraday bounce. Nifty eventually ended with a cut of 1.53% tad above 17550. Our market started the 23 February 2023 session with marginal gains but soon after the sell off resumed to test the 17450 mark. The oversold markets then rebounded sharply post the initial hour to hasten towards 17600 in a flash. However, due to lack of follow up buying, the momentum fizzed out at higher levels. During the remaining part of the session, the Nifty remained sideways and with some weakness towards the end resulted in Nifty concluding the February series on a weak note, tad above 17500.On friday 24 February  Rebound in the early hours of the trading day was short-lived. Sensex erased all gains and fell by 150 points. Nifty closed below 17,500, with metal and auto stocks being under pressure. Santosh Nair decodes the volatility in the markets. Spicejet, NMDC, Nestle and Oil India are also on the radar.At Close, the Sensex was down 141 points at 59463, and the Nifty was down 45 points at 17465.

NIFTY BANKNIFTY: STRONG SUPPORT& STRONG RESISTANCE LEVEL

Taking a glance at the broader price action, all key indices have reached their crucial support zones. We can see them placed around the multi-month trend line levels. Since it was mostly financial led down move recently, the other indices like, BANKNIFTY and FINNIFTY have rebounded sharply and formed a ‘Dragonfly Doji’ pattern precisely at ‘Trendline’ and ‘200-SMA’, respectively. Hence, if global market supports, we will not be surprised to see some recovery in coming sessions.As far as levels are concerned, 17400-17200 should be treated as a key support, which we believe may not get broken easily. On the flipside, 17600 - 17700 - 17800 are to be seen as major hurdles.

TECHNICALLY SPEAKING

With the inflationary pressure sky rocketing and a deep dive towards US recession this year onwards, a fed rate hike of 25 basis points is highly possible. Since the labor market is also tightening, and beyond the 2% target, along with a restrictive stance of monetary policy, this rate hike might be of a hawkish tone to be in line with their quantitative tightening strategyThe Nifty has fallen back into the falling channel, heightening the chances of further downsides. The 50DMA and 14DMA are in a bearish crossover. Also, the current value is sitting well below the critical near-term moving averages, with the momentum oscillator RSI (14) slipping below the reading of 50.The current set-up is likely to keep the Nifty under pressure, with a potential downside towards 17200–17000 over the short term. On the higher end, crucial resistance is placed at 17,800.The bounce is likely to be temporary in nature and is unlikely to result into a trend reversal. The daily momentum indicator has a negative crossover which is a sell signal. Overall, the downtrend is still intact and any bounce should be used as an opportunity to create fresh short positions. We expect Nifty to target level of 17300 from short term perspective.