Last week the market broke down from the 4- week consolidation and closed at the lowest point of the weekly in imbalance. It was a typical trend down week and a move from a composite balance to imbalance.
For the coming week we keep a watch at the POC of the new profile of last week where we expect supply to re-emerge if there is any pullback. The downside at the moment looks capped at about a 100 points below Friday lows which should make for a quieter ( comparatively) 2 way moves in the upcoming week which has a holiday on Friday.
The chart above is annotated with my views.
- On any dips expecting 6766-6744 to hold in the coming week.
- The auction is in more serious trouble if 6744 gets violated and an immediate rush down of 200 points to 6546 and even 6431 can come about
- Broadly remaining above 6875 the auction should test 7065 , then the range extension of 7120 and finally the 7185/7195 zone which should bring more supply
- The levels of 7065/ 7120/ 7195 are resistances
- Supports are at 6875 and 6766
All levels above are for spot prices.
The chart above is annotated like the Nifty with my views.
- For the upcoming week the support is at 13452 spot
- Below 13180 this auction can further weaken to 12750 and 12550
- On any upsides above 13800 the auction can run into further supply at 14500 an 14750 above
- we expect this zone between 14500- 14750 bring more selling in this index if reached during the week.
Broadly speaking the bias of the market after a trend is still downwards . We work with a weekly view and will watch for more selling to come at the highs where the risk reward is better than new sellings at the lows of a trend. Don’t buy dips , sell rises and use the lower prices to collect profits and add again at higher levels.