• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Week Ahead: NIFTY Stays Significantly Deviated From It’s Mean; Stay Vigilant At Higher Levels
Stock

Week Ahead: NIFTY Stays Significantly Deviated From It’s Mean; Stay Vigilant At Higher Levels

by July 13, 2024
by July 13, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

It was the sixth week in a row that saw the Nifty 50 index ending with gains. Over the past days, the markets largely experienced trending days as they continued inching higher despite the intraday moves staying ranged. The Nifty also continued forming its new lifetime highs; the current week has seen the index closing at a fresh lifetime high once again. Over the past five sessions, the Nifty oscillated in a 450-point range. Volatility also modestly expanded; India Vix rose by 8.11% to 13.73 over the previous week. The benchmark Index also closed with a net gain of 178.30 points on a weekly note.

The coming week is truncated, with Wednesday being a trading holiday because of Moharram. The markets are in a firm uptrend; the options data suggests the potential resistance points shifting higher towards 24700-24800 levels. The level of 24500 will also be a crucial level to watch and Nifty’s behavior vis-à-vis that level will dictate the index’s behavior over the immediate short term. While there is no dispute about a strong uptrend, the markets stay significantly deviated from their mean; this makes it necessary to lay an equal emphasis on guarding profits at higher levels and effectively rotating the stocks to stay invested in the ones with strong relative strength and promising technical setups.

Monday is likely to see a positive start to the day. The levels of 24650 and 24800 are likely to act as likely resistance levels for the Nifty. The supports come in lower at 24280 and 21050 levels.

The weekly RSI is 75.86; it remains in the overbought territory. It stays neutral and does not show any divergence against the price. The weekly MACD is bullish and it stays above its signal line.

The pattern analysis of the weekly chart shows that the Nifty is significantly deviated from its mean. The nearest and fastest 20-week MA is 1680 points below the current close; the 50-week MA is 3119 points below the current close. The 20-week MA and the 50-week MA are placed at 22822 and 21383 respectively. The nearest pattern support exists at 24000 levels. Therefore, in the event of any retracement, the 24000 level provides key support; if that gets violated in the future, we will then find the markets reverting to their mean.

Overall, the markets continue to stay in a firm uptrend; there are no signs whatsoever as of now that would suggest that we may see strong selling pressure. However, we can also not overlook the fact that the markets remain overextended from a technical standpoint and some ranged retracement cannot be ruled out, and it looks quite imminent. Given the present technical structure, it is of paramount importance that we vigilantly guard profits at higher levels. While keeping the leveraged exposures at modest levels, all new buying should be kept limited to the stocks seeing improved relative strength and promising technical setups. A cautious outlook 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 a bit of an uncomfortable setup where there are hardly any sectors in the leading quadrant. The Nifty Midcap 50 and Nifty Realty Indices are the only two groups that are inside the leading quadrant; the Realty sector index is on the verge of rolling over into the lagging quadrant.

The Nifty Auto and Consumption Indices have rolled inside the weakening quadrant. Besides this, Infrastructure, Metal, PSE, PSUBank, and Commodities Indices are inside the weakening quadrant. These groups may continue slowing down on their relative performance against the broader markets.

The Nifty Energy Index has rolled into the weakening quadrant. The Nifty Pharma index also stays inside the weakening quadrant.

The IT index has rolled inside the improving quadrant and this marks a phase of the sector’s relative outperformance against the broader markets. Besides this, the Media, FMCG, Banknifty, Services Sector, and Financial Services Indices are inside the improving quadrant.

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
  • When News Moves So Fast, Stocks Can Stand Still
  • The Market Liked FOMC
  • Market Analysis: Top Stock Picks and Sector Insights
  • DP Trading Room: ETFs vs. Indexes
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Fact check: No, Biden has never been a good, honest, or decent man
next post
S&P 500 Sets New Record Highs Because of Value, Not Growth

You may also like

Sector Spotlight: Stocks Lining Up for a Strong July

June 27, 2023

Market Breadth Continues Recovery; Watching the NVDA Effect on QQQ...

September 3, 2023

Top 10 Stock Charts for April 2025: Big Breakouts Ahead?

April 1, 2025

Bears Are Waking Up to the Fact They’ve Missed Out;...

January 30, 2023

Stock Market Today: Tech Tumbles as Mega-Cap Stocks Get Hit...

September 4, 2024

What Seasonality Charts Reveal About the Top Sectors to Watch...

November 12, 2024

Double Top on Semiconductors (SMH)

July 18, 2024

Target’s Stock Defied Gravity When the Market Tanked: Timely Buy...

March 6, 2024

Growth Stocks are PLUNGING Now? Blame Fitch Downgrade!

August 3, 2023

Fibonacci Says Upside to SPX 4300

May 20, 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

    • Nvidia results spark global chip rally

      May 30, 2025
    • Boeing to resume airplane deliveries to China next month, ramp up Max production, CEO says

      May 29, 2025
    • Nuclear Power Trio: OKLO, SMR, and CCJ in Focus

      May 29, 2025
    • Analyzing SIL, USO, and NVDA: Could These Bullish Patterns Trigger?

      May 29, 2025
    • E.l.f. Beauty to acquire Hailey Bieber skin care brand Rhode in up to $1 billion deal

      May 29, 2025

    Popular Posts

    • 1

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

      June 27, 2024 2,764 views
    • 2

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

      August 9, 2024 2,470 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,450 views
    • 4

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

      July 10, 2024 2,429 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,307 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,104)
    • Investing (538)
    • Stock (2,578)

    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

    • Nvidia results spark global chip rally

      May 30, 2025
    • Boeing to resume airplane deliveries to China next month, ramp...

      May 29, 2025
    • Nuclear Power Trio: OKLO, SMR, and CCJ in Focus

      May 29, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,104)
    • Investing (538)
    • Stock (2,578)

    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

    “No Landing” — Sugarcoated Words for...

    February 22, 2023

    Nasdaq 100 (QQQ), Communication Services (XLC)...

    October 13, 2023

    High-Yield Opportunities for an Uncertain Market

    May 13, 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