Dalal Street Week Next: Nifty faces a critical test in key support zones amid growing volatility

Indian equity markets showed strong elasticity, amid the ever -increasing uncertainties on the global front and the rising geographical tensions between India and Pakistan. They only united before finishing the week on a normal negative note. Trading range remained normal; Nifty oscillated in the 590-point range. When markets defended their key support level, instability increased. Unstable barometer, India Weaks, increased from 18.49% to 21.63 on a weekly basis. The headline index eventually closed with a net weekly loss of 338.70 points (-1.39%).

Some important things to note from a technical point of view. 200-DMA is at 24044; The 50-week MA is at 23983. This creates a very important support zone for the Nifty of 23950-24050. As long as the index is able to defend this zone, it will continue to integrate into the stipulated range. If a crucial violation of 23900 levels is made, then growth weakness will only occur. On the side of the side, the charts are clear, the markets continue to resist the increasing trendline resistance. From now on, the behavior of the nift will be crucally important to see a zone of 23950-24050; The ability to defend or defend this zone will notify the trend next week.

The levels of 24350 and 24600 are expected to work as potential resistance points next week. Support comes at 23900 and 23630 levels.

Weekly RSI is 54.36; It remains neutral and does not change against the price. Weekly MACD is booming and its signal is above line. A bearish anglfing candle has emerged. Its emergence near the pattern resistance will add reliability to the resistance placed near 24500-24600.

The pattern analysis of both daily and weekly charts shows that the Nifty trades quite on the expected lines and in the analyzed range. It continues to resist the growing trendline resistance near 24500-24600; He has so far received 200-DMA and 50-week MA. Has defended the key in the middle. Markets will only weaken if they violate a critical level of 23900; Until this point saves, we can expect the markets to be integrated into the defined category.

Depending on the overall technical composition, it is likely that the markets will not show immediate Ward. While the markets break the 23900 level, it is suspicious that they will start any durable trending uphum Ove and will soon proceed to the level of 24500. The cost of hedging activity and hedging has increased; This is clear from VIX, which has increased significantly in the last few days. While the Nifty has saved the key support level so far, it remains in a technically challenging environment. It is strongly recommended that market participants take a protective approach by focusing on stocks with low beta stocks and improvement in relevant strength. Staying low at leverage positions, a constant precautionary point of view is advised for next week.

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 PSE index has been turned within the leading quadrant. Infrastructure, Nifty Bank, PSU Bank, FMCG, usage, goods and financial services indicators are also within the leading quadrant. These groups will forward a relatively wide Nifty 500 index.

The Nifty Metal Index has turned within a weak quadrant. This can slow down the field and abandon its related influence. The service sector index is also in this quadrant.

While the Nifty IT index continues to move in the Legging Quadrilateral, auto and realty indicators are sharply improving their related pace against widespread markets while living within this quadrant.

The Nifty Midcap 100 index correction has turned within the quarter and may see an improvement in its related performance in the coming days. Media and ENERGY Subjects are also within this quadrant, and may continue to improve their related influence against widespread markets.

Important Note: RRG ™ charts show the relevant 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

(Disclaimer: The recommendations, suggestions, opinions and views given by experts are their own. This does not represent the views of the economic time)