NIFTY WEEKLY OUTLOOK & OPTION CALL PUT TIPS FOR 22 MAY TO 26 MAY 2023

WEEKLY RESISTANCE FOR NIFTY: 18300, 18400, 18500

PIVOT POINT: 18200

WEEKLY SUPPORT FOR NIFTY:  18100, 18000, 17900

WEEKLY CHART FOR NIFTY

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Despite not-so-favorable global signals, our markets started the week of May 15, 2023 slightly in the green. After the initial surge, the bulls gained the dominant position and then continued their move north to even surpass the 18450 level on an intraday basis. However, with a modest gain towards the end of the price, Nifty closed the session around the 18,400 mark, posting a gain of almost half a percent. Our markets started the Tuesday session on May 16, 2023 on a promising note, but soon saw profit booking as prices fell during the session, erasing Monday's gains. Contrary to the last few sessions, there was no significant recovery throughout the day as Nifty eventually ended just below 18300 down 0.61%. On Tuesday evening, US stock markets came under significant pressure resulting in a slightly negative open for our markets as indicated by the SGX Nifty on may 17, 2023. The Nifty started slow and showed some composure around the 18300 level during the opening trade, suggesting the possibility of a bullish recovery. However, gains were booked again during the day, leading the Nifty to reach a testing level around 18100. Finally, there was some easing in the second half as a slight recovery set in, resulting in the Nifty closing just below 18200 down a little over half a percent. After two days of earnings posting, the global constellation was looking extremely encouraging and as SGX Nifty suggested our markets started the 18th May 2023 session with a decent bounce at the open. The financial area remained stable from the start, although the reference index Nifty gave back its gains in the first half of the year. In fact, it continued to sulk as we entered the second half of the year, eventually affecting stronger banking conglomerates (courtesy of SBI correction, which published its numbers). As a result, the Nifty eventually ended the session near the day's low, losing nearly three-tenths of a percent. Benchmark stock indexes rallied on Friday 19 may 2023, settling higher, breaking a three-day losing streak. A surge in IT stocks lifted sentiment on Dalal Street, although earnings bookings weighed on action in early trading. The Sensex jumped 297 points to 61729 while the Nifty 50 was 73 points higher at 18203. Broader market indices also ended the day with strong gains as volatility dropped significantly. Sentiment on Dalal Street improved today as investors reacted to positive global signals and the chances of an early US debt ceiling agreement increased. Another factor that has boosted domestic market sentiment is continued buying by overseas institutional investors.

NIFTY: STRONG SUPPORT& STRONG RESISTANCE LEVEL

There is a possibility that domestic markets could continue to consolidate as investors take profits. While the market saw some gains at higher levels, overall strength is evident and dips are being taken. Positive global signals, a season of good results and consistent FII buying have supported the market. We expect the market to resume its uptrend after a pause this week.

 TECHNICALLY SPEAKING

Nifty formed a hammer pattern on the daily chart, indicating a possible trend reversal. It found support at the 21EMA, leading to a smart rebound from the daily low. Positive divergence was observed on the hourly RSI, indicating a possible shift in momentum. Resistance at the top end comes in at 18300 while support comes in at 18050. The positive divergence of the hourly momentum indicator suggested a loss of momentum to the downside, which in turn favored the uptrend. Therefore, both the price and momentum indicators are suggesting that there could be further upside in the next few trading sessions. In terms of levels, 18,300-18,350 is the immediate hurdle zone, while 18,100-18,050 is expected to act as a crucial support zone. Overall, we still believe that the Nifty is in a consolidation mode and the consolidation range is likely to be between 18k and 18400.