Weekly Market Outlook for 05 February to 09 February

Our markets rallied higher in the week gone by amidst higher volatility due to events such as Interim Budget and Fed Policy. The index formed a new record high of 22126 on the last trading session, but it gave up some of the gains towards the end and closed around 21850 with weekly gains of over two percent.

Nifty Today:

In the week gone by, the indices traded with higher volatility an account of couple of big events. The index gave a breakout in Friday’s session above 21800 mark and rallied higher to mark a new record higher. However, it was not over yet the markets corrected sharply from the high and ended near the lower end of the day’s range. Now as the index recorded new high it seemed that the markets are geared for a higher high, but Friday’s charts do not seem much encouraging as the daily charts resembles a ‘Shooting Star’ candlestick pattern and also probability of a ‘Double Top’ pattern. Both these mentioned patterns are trend reversal pattern in technical analysis and hence, the follow up move in the coming week will be important to see. The ‘20 DEMA’ support is placed at 21600 which if breached, then we can see a corrective phase again towards 21350-21250 zone. On the flipside, the Nifty needs to surpass the high of 22127 to negate the above mentioned reversal pattern and in such case the uptrend would continue.

                               Volatile week ends with trend reversal pattern on Nifty charts

Considering the chart structure, it is advisable to remain neutral on markets at current juncture and wait for the follow up move in the coming week which would confirm the near term trend. Traders are advised to trade with a stock specific approach and avoid aggressive positions.
 

Nifty, Bank Nifty Levels and  FINNIFTY Levels: