• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Week Ahead: NIFTY Holds 50-Week MA; Low VIX Calls For Vigilant Approach At Higher Levels
Stock

Week Ahead: NIFTY Holds 50-Week MA; Low VIX Calls For Vigilant Approach At Higher Levels

by March 4, 2023
by March 4, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

It was largely a troubled week for the Indian equities as the markets spent four out of five days struggling to keep their head above the crucial 200-DMA which currently stands at 17404. Had it not been for Friday which saw a sharp surge in the Indices, the week was very much on track for a negative close. Given the decline in overall volatility, the trading range of the markets remained narrow. As compared to the previous week where the NIFTY moved in the 582.55 points range, the index moved in a 389.55 points range. However, while it was able to keep its head above the important 200-DMA, the headline index ended with a net gain of 128.55 points (+0.74%) on a weekly basis.

The coming week will be a truncated one; Tuesday will be a trading holiday on account of Holi. The importance of VIX levels has resurfaced again; INDIAVIX is again at one of its lowest levels seen in the recent past. The previous week has seen INDIAVIX coming off by 14.13% again to 12.18. This is something that warrants caution again. While we approach the markets, one eye will have to be on the volatility as such low levels of volatility depict the complacency of the market participants and often ends up giving a rude shock to the indices.

Besides this, from a technical perspective, NIFTY has taken support on a falling trend line which also coincides with the 50-Week MA which is currently placed at 17345. This level marks an immediate for the NIFTY on a closing basis. The coming week is likely to see a quiet start to the week; the levels of 17650 and 17800 will act as likely resistance levels. The supports come in at 17350 and 17180 levels.

The weekly RSI is 47.68; it remains neutral and does not show any divergence against the price. The weekly MACD is bearish and trades below the signal line.

The pattern analysis of the weekly charts shows that the NIFTY has formed a minor falling channel on the charts. Besides that, the index has taken support on a falling trend line; this trend line begins from the high point of 18350 and joins the subsequent lower tops. This pattern support also coincides with the 50-Week MA which currently stands at 17345. This makes the zone of 17350-17400 an immediate support zone for the NIFTY.

Overall, the sharp decline in volatility over the previous week and with INDIAVIX at breaching the most immediate low point seen in early February is certainly a cause of concern. It may not cause any immediate harm but persistently low levels of volatility denote complacency of the market participants. Any spike in the VIX will adversely impact the markets in general. Even if there is no major decline, it is capable of injecting markets with some spikes in the near term. It is strongly recommended that one needs to keep leveraged exposure at very modest levels and stay invested in the low beta stocks and with the ones that have improving relative strength. A cautious approach is advised for the coming truncated 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 NIFTY PSE, Auto, FMCG, and IT indices firmly placed inside the leading quadrant. The MidCap 100 Index has also rolled inside the leading quadrant. These groups are likely to show resilience and may relatively outperform the broader NIFTY500 Index.

The NIFTY Infrastructure index has rolled inside the weakening quadrant. Besides this, Banknifty, Metal, Services Sector, Financial Services, Commodities, and PSU Bank Indices are inside the weakening quadrant.

NIFTY Energy Index is seen badly languishing inside the lagging quadrant along with the Media Index. It may continue to relatively underperform the broader markets. The Realty Index is also inside the lagging quadrant; it is seen improving its relative momentum against the broader markets.

NIFTY Consumption Index is inside the improving quadrant along with the Pharma Index. Both these indices are seen slightly giving up on their relative momentum against the broader NIFTY500 index.

Important Note: RRG™ charts show the relative strength and momentum of 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
  • Drought in Key Regions for Major U.S. Crops
  • CHAOS-Insert Any Headline Here-BUY #GOLD
  • Top Strategies to Outperform This Market
  • Tesla Tests Key Support: Is This a Trade? Or an Investment?
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Many Stocks in This Industry Popped After Strong Earnings Results — This Similar Company is Due to Report Next Week!
next post
Bill to sanction groups involved in China’s bloody human organ harvesting industry advances in the House

You may also like

Sector Rotation Breakdown: Spotting Market Leaders Now

March 14, 2025

Market Trend Model Turns Bearish

March 18, 2023

Week Ahead: NIFTY Remains Prone To Profit Taking; Low Levels...

April 8, 2023

DJIA/Gold Ratio vs. Consumer Sentiment

August 11, 2023

Rate-Sensitive and Big Tech Names Strengthen as Market Breadth Gets...

May 15, 2023

Predicting Tomorrow’s Price Movements Today: Introducing the Williams Cycle Forecast

August 30, 2023

S&P 500 Sectors Play Musical Chairs: How To Win the...

February 5, 2025

The Halftime Show: Fitch Downgrade Sends TLT Closer to Target...

August 3, 2023

Market Chaos: How to Spot Bottoming Stocks Before the Rebound

February 13, 2025

DP Trading Room: Magnificent Seven Earnings Preview

October 28, 2024

    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

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

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

      June 27, 2024 2,631 views
    • 2

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

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

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

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    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

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    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

    The Halftime Show: Are Broadline Retailers...

    August 9, 2023

    Overbought until it Turns – Using...

    April 14, 2023

    The Market’s Contagious Buzz: What About...

    March 23, 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