• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Week Ahead: NIFTY May Continue Finding Resistance At Higher Levels; These Sectors May Relatively Outperform
Stock

Week Ahead: NIFTY May Continue Finding Resistance At Higher Levels; These Sectors May Relatively Outperform

by April 6, 2024
by April 6, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

In the previous technical note, it was categorically mentioned that while the markets may attempt to inch higher, they may not form anything beyond minor incremental highs and may largely continue to stay under consolidation. In line with the analysis, the Nifty did form a new lifetime high, but eventually continued to consolidate and avoided any strong move on the upside. The markets had a modest trading range; the index oscillated in a 315-point range over the past five sessions. The volatility slipped further; India Vix came off by 11.65% to 11.34. The headline index closed with a modest weekly gain of 186.80 points (+0.84%).

From a technical perspective, the NIFTY will need to move past the 22550-22600 zone with a strong thrust for any sustainable move to take place. Further, the Options data also suggests that strong Call OI built up in this zone may continue to pose resistance for the markets. A sustainable uptrend would commence only after the Index moves past this zone; until this happens, we may see the markets finding selling pressure at higher levels increasing the need for vigilant protection of profits until a fresh breakout is achieved.

A quiet start is expected to the new week; the levels of 22600 and 22790 would act as potential resistance levels. Supports come in at 22380 and 22100 levels. The trading range is likely to stay modest over the coming week.

The weekly RSI is 69.81; it continues to show a mild bearish divergence against the price. The weekly MACD is bearish and trades below its signal line.

A spinning top occurred on the candles. Such candles typically have small real bodies because of little difference between the open and close price. They show the indecisiveness of the market participants. Such formations, if they occur near the highs often have the potential to stall the upmoves.

The pattern analysis of the weekly charts shows the markets being in a firm uptrend. However, that being said, the markets are also exhibiting signs of fatigue at higher levels. They are also showing a minor loss of internal strength as they mark incremental highs along with minor negative divergences. All and all, while the trend continues to stay intact, there are possibilities of markets staying under some ranged consolidation. The nearest support for the Nifty exists at 20-week MA which is placed at 21691.

All in all, we are likely to see some risk-off setup in the markets. We can expect defensive pockets like Pharma, IT, FMCG, etc., to offer better relative strength than the others. However, the banking space is likely to stay resilient as well.  It is strongly recommended that unless a strong breakout is achieved with Nifty moving past the 22550-22600 zone with a thrust, all up moves must be used to protect profits at higher levels. Low levels of VIX too remain a concern and may infuse some spikes in volatility. A cautious approach with one eye on the protection of gains 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.

Relative Rotation Graphs (RRG) show that the Nifty Commodities, Energy, and Infrastructure indices are inside the leading quadrant. However, they are seen giving up on their relative momentum. Besides these groups, PSU Banks, Pharma, and Auto groups are inside the leading quadrant. The Metal index has also rolled inside the leading quadrant. These groups are set to relatively outperform the broader markets.

The Nifty PSE index has rolled inside the weakening quadrant. Besides this, the Midcap 100 and the Realty Indices are also inside the weakening quadrant.

The Nifty IT has rolled inside the weakening quadrant. The Nifty FMCG and Media indices also continue to languish inside the weakening quadrant. The Services sector index is also inside this quadrant but it is seen improving on its relative momentum.

While the Nifty Consumption Index is inside the improving quadrant, the Banknifty and Financial Services index has rolled inside the improving quadrant hinting at a potential end to their relative underperformance.

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
  • Crude Oil: Obstacles Ahead of $100
  • MEM TV: S&P Regains Upside Momentum
  • AAPL and TSLA Stocks Are COLLAPSING!
  • Fishhooks
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Want to bet against Trump Media stock? It’ll cost you
next post
Biden raises more than $90 million in March, over $187 million in first quarter of 2024

You may also like

Is There Big Tech Trouble in FANG(sta :) Paradise?

June 16, 2023

DP Trading Room: Don’t Forget The MONTHLY CHARTS! Earnings Spotlight

September 27, 2023

The Ord Oracle April 11, 2023

April 12, 2023

SMH Bulls are Skating on Thin Ice

April 23, 2023

Top Ten Charts for August: Two Tempting Consumer Staples Names

August 20, 2024

Week Ahead: Upsides For NIFTY May Stay Capped; Sectoral Landscape...

April 28, 2024

Moxie Indicator Alerts: Predicting Yesterday’s Market Pullback!

November 10, 2023

The Halftime Show: The One Indicator That Gave Me an...

July 17, 2023

Target: Poised for an Explosive Breakout?

March 2, 2023

Earnings Preview: The Technical Temperature

January 29, 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

    • 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
    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’ consumer products

      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 (2,581)

    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

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

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

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

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    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

    TOP 10 Stock Picks for May...

    May 17, 2024

    January’s Performance: A Good Start for...

    January 31, 2023

    The Financial Sector’s Bullish Comeback: Is...

    January 16, 2025
    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