Dalal Street Week Next: Look for key contrast signs before fresh purchase

Were short last week; Due to a trading holiday due to Ramadam ID, Indian markets were traded for four days. However, mostly while staying bearish, markets have made the US. Almost everyone pushed the storms of reciprocal tariffs and announcing a serious trade war.

Equity markets around the world are likely to remain under pressure and in a little unrest. However, Indian markets are likely to be relatively elastic. We live in a world that is interconnected; It is not surprising if we see markets under pressure with other equity markets. However, the expected outperformance of the Indian market will be. This was clear in the past week because the Nifty and the Nifty 500A 2.61%and 2.50%, the US. Key Indicators lost 9.08%, 10.02%and 7.86%respectively in SPX, Nasdaq, and Dow. While India’s VIX has increased by more than only 8%, CBOE Weaks recorded 109.14% on a weekly basis.

While Indian markets can also show shock and stay under pressure, this related outperformance is likely to continue.
Next week is short again, Thursday is a business holiday for Shri Mahavir Jayanti. Markets are expected to start on Monday following global weakness.

Next week, we can expect the levels of 23050 and 23300 to act as potential resistance points. Importantly, support is expected at 22600 and 22450.

Weekly RSI is at 44.93; It remains neutral and does not show any variation against the price. Weekly MACD is bearish; However, a sharp compressed histogram indicates on a potentially positive crossover in the future. A strong dark-physical candle shows constant pressure in the markets.

Pattern analysis of the weekly chart shows that after raising a 100-week man, the Nifty put a strong rally that stuck in the 50-week mother. This is placed on MA 23849; This was the support that the index violated in the following route and now acted as a resistance. Last week, the Nifty also received a 20-week M.A. Below was found to slip at 23412. While the index remains in a secondary trend, it remains in a large but well -defined trading range that is built between 23400 on the upper side and 22100 on the lower side.

Although short, it is expected to look at the widespread trading range next week and have some more instability. It is strongly recommended that when a valuation looks attractive enough to start buying, all fresh purchases should be stopped. Someone should go out and buy everything at the same time, but one should do it when it allows stabilizing the values ​​and indicating the potential opposite point. Leverage conditions must be kept at a modest level, and fresh purchases must be limited to places where there is emerging strength. A cautious approach is advised for next week.

In our appearance on related rotation graphs, we have compared different sectors against the CNX 500 (Nifty 500 index), representing more than 95% of all the shares listed. Relative Rotation Graph (RRG) Nifty Bank and Financial Services Indicators show and are firmly rolling within the leading quadrilateral. In addition to these two indicators, Nifty Commodities, Metal, Infrastructure and Services field indicators are also within the leading quadrant.

The Nifty Pharma index is the only one within the weak quadrant.

The Nifty IT index rotates within the Legging Quadrant and with the Nifty Midcap 100 index it is slipping within the quadrilateral. The Nifty Realty and Media Index are also in the legging quadrant; However, they are improving the relevant pace against widespread markets.

The Nifty PSE and ENERGY Raza Indicators are within the quarter of the correction with the PSU Bank index, which is seen improving their relative pace. FMCG, auto, and consumption index are also within the correctional quadrant, but are found to be back to the Legging Quadrant, leaving their respective pace against widespread markets.

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