Dalal Street Week forward: Consolidation is likely to continue between the uncertainty of global trade

The Nifty trades in large quantities during the week, oscillating within a well-defined band, and ending the week on a negative note. After the strong opening, the index saw a high level of sale pressure, left under a narrow range of 25246–24806, which spreads 440 points before settling slightly. Meanwhile, the India VIX declined by 1.03% on a weekly basis, closing at 11.27.

For the week, the Nifty ends with a small loss of 131.40 points, or (-0.53%.) The index faces strong overhead resistance as it struggles close to the upper edge of the growing channel formation. Despite recently reclaiming the above 20-week moving average, the Nifty is showing signs of fatigue as it comes closer to the upper bowler band.

The crucial move beyond any of these layers can stimulate a directional move. Going next week, the markets can see a cautious or flat opening unless there is a strong global trigger. Uncertainty continues around the US trade deal, August 1 August is approaching rapidly.

Side Late, resistance is likely to be available at 25150 and 25400 levels, while support is expected at 24600 and 24450.

Weekly RSI.9 is 54..98 and remains neutral, which shows no variation against price. Weekly MACD lives in by mode, trading above the signal line, which shows the pace of the residue boom. There is no significant candle contrast pattern on the weekly chart.

From the point of view of the pattern, the Nifty continues to oscillates within the growing channel that began in March 2023. When it breaks the lower edge shortly in late April, then it reclaimed the trendline and is now testing the upper boundaries. The price is above its 20-, 50- and 100-week moving average, strengthening the intermediate uptrend.

However, until a breakout above the channel, the index is likely to see the rotation or lateral motion with the specified layers functioning as the base.

Given the current composition and the lack of critical breakout, traders should be selective and avoid aggressive conditions. The sensible approach is to protect the existing benefits and to avoid chasing the nearest price of resistance. The stock-specific strategy with tight stop damage will work better in the current scenario. The comprehensive approach next week should be one of the cautious partnerships, keeping in mind the key levels and waiting for a directional resolution.

In our appearance on the Related Rotation Graph®, we compared different sectors against the CNX500 (Nifty 500 index), representing more than 95% of the free-float market cap of all listed shares.

Related Rotation Graph (RRG) shows that the Nifty Realty, Media, Metal, Midcap 100 and PSU Bank indices are within the leading quadrilateral. The group is likely to continue to move relatively wide markets.

Financial services, ENERGY Raza, Bank Nifty Index is within a weak quadrant. FMCG, consumption, healthcare and pharma indicators are within the legging quadrant. However, except for the FMCG, the rest showed an improvement in their relative motion.

The IT index reform is seeing a slowdown in its relative motion while living within the quadrilateral. Auto index is located within this quadrant, with customer durable index, which has just gone to the correction quadrant.

Important Note: RRGTM charts show the relative strength and motion of a group of stocks. In the above chart, they show relevant performance against the Nifty 500 index (extensive markets) and should not be used directly as signs of purchase or selling.

Milan is the founder of Vaishnav, CMT, MSTA, Consulting Technical Analyst and EquitySarch.sia and Chartwizard.AE and located in Vadodara. It can be reached at Milan.Shishnav@equityresearch.asia