• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Week Ahead: NIFTY’s Behavior Against This Level To Influence Trends For The Coming Weeks
Stock

Week Ahead: NIFTY’s Behavior Against This Level To Influence Trends For The Coming Weeks

by December 21, 2024
by December 21, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

After staying in the green following a sharp rebound the week before this one, the markets finally succumbed to selling pressure after failing to cross above crucial resistance levels. The Nifty stayed under strong selling pressure over the past five sessions and violated key support levels on the daily charts. The range remained wider on the anticipated lines; the Nifty traded in a wide 1243-points range over the past days. Volatility shot up as well; the India VIX surged 15.48% higher to 15.07 on a weekly basis. Following a weak performance, the headline index closed with a weekly loss of 1180.80 points (-4.77%).

Over the past few days, the Nifty has shown many technical events highlighting the importance of some key levels. The Index resisted the 100-DMA for several days and the 20-week MA for some time; this highlights the importance of these levels as key resistance points for the markets. In the process, the Nifty closed below the key 200-DMA, placed at 23834 while dragging the resistance points lower. The Nifty has also closed a notch above the crucial 50-week MA level placed at 23530. The markets had staged a mosterous rebound when this level was tested before. The Nifty’s behavior against the level of 50-week MA would determine the trajectory not just for the coming week but also for the immediate near term as well.

Next week is truncated, with the Christmas holiday on Wednesday. Expect a tepid start to the week on Monday. The levels of 23750 and 23830 would act as potential resistance points. The supports come in at the 23500 and 23285 levels on the lower side.

The weekly RSI is 44.41; it stays neutral and does not show any divergence against the price. The weekly MACD is bearish and stays below its signal line. The widening Histogram hints at accelerated downside momentum. A large black candle occurring at the 20-week MA adds to the credibility of this level as a major resistance area for the markets.

The pattern analysis of the weekly charts shows that after completing the painful mean reversion process, the Nifty staged a strong technical rebound after it took support at the 50-week MA. The Index resisted at the 100-DMA and the 20-week MA, which are close to each other. The intense selling pressure over the coming week has seen the Nifty almost retesting the 50-week MA by closing just a notch above this point. The Nifty must keep its head above this crucial support level to keep its primary uptrend intact. If this level gets meaningfully violated, we might be in for a prolonged intermediate trend over the coming weeks.

Even if the trend remains weak and the downtrend continues, a modest technical rebound cannot be ruled out. However, it would still keep the markets under corrective retracement unless a few key levels are taken out on the upside. It is strongly recommended that leveraged exposures be kept at modest levels. All new exposures must be highly selective, and all gains, even modest ones, must be guarded very carefully. It is also recommended that one not rush in to shorten the markets so long as they are above 50-week MA, as there is a possibility of a modest technical rebound. A highly selective and careful 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.

Relative Rotation Graphs (RRG) show Nifty Bank, Financial Services, Services Sector, and the IT indices inside the leading quadrant. These sectors are likely to outperform the broader markets relatively.

The Nifty Pharma Index is inside the weakening quadrant. The Midcap 100 Index is also inside the weakening quadrant but is improving its relative momentum.

The Nifty Media, Energy, Commodities, Auto, and FMCG indices continue to lag inside the lagging quadrant. The Consumption Index has rolled inside the lagging quadrant as well. These groups are likely to underperform the broader Nifty 500 Index relatively. The Nifty PSE Index is also inside the lagging quadrant but is improving its relative momentum against broader markets.

The Infrastructure Index has rolled inside the improving quadrant and is likely to begin its phase of relative outperformance. The Realty and the PSU Bank Indices are also inside the improving quadrant. The Metal Index, also inside the improving quadrant, is sharply giving up on its relative momentum.

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
  • DP Trading Room: Final Earnings are In for 2023 Q4!
  • Small Caps Poised to Soar: Is Now The Time To Buy IWM?
  • Chesapeake Energy: A Stock That Could Pump Much More
  • This Relative Strength Signal Can Provide Early Warning Signs
Share
0
FacebookTwitterPinterestWhatsapp

previous post
CFPB sues America’s largest banks for ‘allowing fraud to fester’ on Zelle
next post
Netflix secures U.S. rights to the FIFA Women’s World Cup in 2027, 2031

You may also like

SCTR Report: The Palantir Trade Follow-Up—Transform Insights into Actions

November 19, 2024

With 2024 Q2 Earnings In, Market Remains Very Overvalued

October 1, 2024

Week Ahead: While NIFTY Continues To Consolidate, Watching These Levels...

May 3, 2025

Real-Time Options Strategies on Your ChartLists? Yes, Please!

April 25, 2025

Breadth is Not Keeping Pace with the Bounce

September 12, 2023

MEM TV: How to Trade Nvidia After Its 15% Gain

May 25, 2024

DP Trading Room: Deceptive Volume Spikes

December 23, 2024

Energy; A Long Term Turnaround in Relative Strength is Brewing

March 19, 2024

Jobs Soar Past Estimates, But What Happens Next?

October 4, 2024

Discretionary vs Discretionary, a Fierce Battle Under the Hood

February 2, 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

    • The Fed Is Getting It Wrong AGAIN As They Hold Rates Steady

      June 19, 2025
    • DOJ seizes record $225 million in crypto tied to global ‘pig butchering’ scams

      June 19, 2025
    • Feeling Unsure About the Stock Market’s Next Move? These Charts Can Help

      June 18, 2025
    • Amazon expects to cut corporate jobs as it relies more on AI

      June 18, 2025
    • The Secret To Streamlining Your Charting Workflow

      June 18, 2025

    Popular Posts

    • 1

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

      June 27, 2024 2,870 views
    • 2

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

      August 9, 2024 2,574 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,556 views
    • 4

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

      July 10, 2024 2,536 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,412 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,139)
    • Investing (538)
    • Stock (2,620)

    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

    • The Fed Is Getting It Wrong AGAIN As They Hold...

      June 19, 2025
    • DOJ seizes record $225 million in crypto tied to global...

      June 19, 2025
    • Feeling Unsure About the Stock Market’s Next Move? These Charts...

      June 18, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,139)
    • Investing (538)
    • Stock (2,620)

    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

    S&P 500 Head and Shoulders Top...

    September 23, 2023

    Hot Gold Drops & Shaky Semis...

    May 8, 2023

    The Hoax of Modern Finance –...

    January 26, 2024
    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