• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Week Ahead: Markets Approaches Union Budget In A Bruised State; Expect Volatility To Remain High
Stock

Week Ahead: Markets Approaches Union Budget In A Bruised State; Expect Volatility To Remain High

by January 28, 2023
by January 28, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

It was an immensely volatile and eventful week for the Markets as they headed towards the last weekly close before the Union Budget. The last three sessions, more particularly, the last two sessions remained marred by the severely bearish reactions to Hindenburg Research’s report on the Adani Group stocks. Hindenburg Research is a “forensic financial research” that specializes in spotting companies around the globe that are engaged in wrongdoings and frauds and they have accused Agani Group of brazen stock manipulation and running an accounting fraud scheme for decades.

The NIFTY, which was seen taking support on the 20-Week MA for five weeks in a row, suffered a strong bearish move on the downside; it violated crucial support levels and dragged resistance levels lower. The index saw a wide trading range of 707.70 points over the previous week. It eventually ended with a net loss of 423.30 points (-2.35%); from the intra-week high point, the NIFTY came off by 600-odd points. Volatility spiked; INDIAVIX rose sharply by 25.65% to 17.32.

The damage that the past sessions have inflicted on the markets has been significant from a technical perspective. More so when we head into the Union Budget this coming week. The NIFTY has violated the 20-Week MA on the weekly charts stands at 17896 and also the 100-DMA which is currently placed at 17950. In the process, the index has dragged its resistance points lower. The coming week has strong resistance at 17750 and 17860 levels. Supports come in at 17400 and 17250 levels.

The weekly RSI is at 47.95; it has marked a new 14-period low which is bearish. It stays natural and does not show any divergence against the price. The weekly MACD is bearish and trades below the signal line.

A large Engulfing candle has emerged; its emergence while violating important support makes it even more potent in nature.

The pattern analysis shows that the NIFTY has ended up violating two important support levels on different timeframes of charts. It has breached the 20-Week MA which is at 17896 and has also ended up violating the 100-DMA which stands at 17950. This price action has dragged the resistance points for NIFTY quite lower. It also means that all technical pullbacks will find strong resistance at this point and may meet with selling pressure unless the zone of 17900-17950 is taken out convincingly.

We head into Union Budget this week; Union Budget is scheduled to be tabled on Thursday, February 02. This is set to infuse a lot of volatility over the coming days. On one side, the markets are yet to finish their reaction to Hindenburg Report where the allegations leveled are absolutely serious in nature; on the other hand, it is also set to react to Budget proposals that will be presented.

While the markets face the double-edged sword of volatility, the best way to navigate such an uncertain environment is to keep leveraged exposures at modest levels. Besides this, it would be best to stay invested in sectors like PSE, IT, FMCG, Pharma, etc., which are showing good improvement in the relative strength against the broader markets, or stay invested in low beta sectors that will stay less volatile than the markets in general. From a technical standpoint, NIFTY will not show any meaningful and sustainable up move so long as it stays below 17950. Overall, a highly cautious approach is advised for the coming week.

Sector Analysis for the coming week

In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks listed

The analysis of Relative Rotation Graphs (RRG) shows some visible changes in the overall sectoral setup as compared to the previous week. NIFTY PSE, Metal, Infrastructure, PSU Bank, and commodities are placed inside the leading quadrant. Out of this, PSE is the only sector that is seen firmly rotating inside this quadrant. The others are showing paring of relative momentum against the broader markets.

Banknifty, Nifty Services Sector, and Financial Services Sector index have rolled inside the weakening quadrant. They may continue to perform individually but may not perform well on relative terms.

NIFTY Realty and Media Sector indexes are seen languishing inside the lagging quadrant. However, apart from this, Auto, Consumption, Midcap 100, and FMCG indices are inside the lagging quadrant but they are seen sharply improving on their relative momentum.

The pharma index has rolled inside the improving quadrant and is firmly placed along with the IT Index. The Energy Sector index is also inside the improving quadrant but it is seen slightly giving up on its relative momentum.

Important Note: RRG™ charts show the relative strength and momentum for a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.  

Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae

You Might Also Like
  • It’s Time To Consider These Areas As Emerging Leaders
  • DP Trading Room: This Powerful Scan Finds Stocks Showing NEW Momentum
  • Still BULLISH NVDA Despite DeepSeek?
  • Will Shutterstock Buck the Bear Trend?
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Inflation, What Inflation?
next post
Ready, Set, COVER! Breakouts Are A Short Seller’s Worst Enemy

You may also like

Economic Modern Family: More to Prove to Traders

February 13, 2023

Choppy Markets Require Patience

March 30, 2023

Four MACD Patterns That Repeat

June 1, 2023

DISCOVER the Top Consumer Discretionary Stocks

October 22, 2024

Wyckoff at Work in the Intraday Timeframe

June 3, 2024

Earnings Season Has Started EXACTLY As I Would Have Expected

January 16, 2023

September: Exit Light, Enter Night

September 8, 2024

Powerful 2-Timeframe Setup

June 30, 2023

The Hoax of Modern Finance – Part 4: Misuse of...

January 8, 2024

Plenty of Strength in HY Bond A-D Line

December 22, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Week Ahead: NIFTY Stays In A Defined Range; Moving Past This Level Crucial For Resumption Of Upmove

      May 31, 2025
    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,582)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Week Ahead: NIFTY Stays In A Defined Range; Moving Past...

      May 31, 2025
    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,582)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Can the S&P 500 Rally Without...

    November 27, 2024

    You Need To Understand NOW What...

    March 24, 2024

    About That Liquidity Crisis – How...

    March 12, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here