Weekly Market Outlook for 23 Jan to 27 Jan

Weekly Market Outlook
Weekly Market Outlook

Market Outlook
by Ruchit Jain Last Updated: 2023-01-23T11:37:34+05:30

The week gone by did not start well as the index witnessed some selling pressure around its ‘20 DEMA’ resistance. However, Nifty rallied higher from Tuesday onwards and it finally gave a breakout above the average after a month. Nifty rallied towards 18200, but then consolidated towards the end and gave up some of the gains to end tad above 18000 with weekly gains of less than half a percent.

 

Nifty Today:

 

Nifty started the week around 18030 mark and after the ups and down during the week, the index ended around the same level forming a ‘Doji’ candlestick pattern on the weekly chart. Infact, Nifty has formed a similar candle which indicates indecision for the second consecutive week and it has traded with the broad range of 17770-18270 since last four weeks. Ideally, the breakout from this broad range will lead to the next directional move for the index and till then, it could continue to oscillate within this range. If we look at the data, FII’s have covered their short positions during the week and their ‘Long Short Ratio’ has increased from 38 percent to around 50 percent now. This data which was bearish for most part of this month so far has now turned neutral. The U.S. markets have corrected during this week, but they are still above their crucial support. The Dollar Index continues its corrective phase and thus the INR has appreciated and is hinting at the possibility of further appreciation. Thus, the data is not negative and hence, we do not expect any significant correction going ahead. Once the index breaks beyond the above mentioned range, we will then see a clear direction. Till we are holding above the swing low supports, we advise traders to look for stock specific buying opportunities.

 

Back to Back ‘doji’ candles on weekly charts indicates consolidation phase

 

Back to Back ‘doji’ candles on weekly charts indicates consolidation phase

 

On Friday, the Bank Nifty showed a good outperformance compared to Nifty. A follow up move above 42700 could set a good momentum in this index for the short term. Also, the Nifty PSE index has been showing good strength and is close to its previous swing highs. Traders can look for stock specific opportunities from the PSE stocks as these could continue outperformance in the near term. 

 

Nifty & Bank Nifty Levels:

 

Nifty Levels

Bank Nifty Levels

Support 1

17980

42345

Support 2

17930

42185

Resistance 1

18110

42700

Resistance 2

18200

42870

 

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About the Author

Ruchit Jain is Lead Research Analyst at 5paisa. He has a vast experience of 14 years in this field and is proficient in Technical and Derivatives Research. He has completed his CMT (U.S.A.) and has done Masters in the field of Finance at Mumbai University.

Disclaimer

Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.

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