Market Outlook for the week

NIFTY continues to drift lower for the fifth consecutive week amid extreme volatility. Marginal recovery was seen on Friday which might be carried forward in the next week as well. Nifty has formed morning star like candlestick pattern on the daily chart, which is considered as a bullish reversal pattern. Now, we might see some pullback towards 8900 and above that, it may move towards 9500. But the medium-term trend continues to remain negative as long as Nifty trades below 10700 mark.

If we take the Fibonacci retracement of the entire recent fall from the top, then the 23.6% retracement is coming around 8918 which will now act as immediate resistance, then 38.2% retracement is at placed at 9588. The immediate support is now placed at 8200 and below that index may again slip towards 7800 levels.

The momentum indicator “RSI” has shown signs of reversal from its deeply oversold territory, which hints of some pullback but the index is not out of woods yet. The sentiment indicator”INDIAVIX” surged approximately 33% this week and ended at an 11-year high of 67 levels, which is a major concern for the bulls.

BANKNIFTY underperformed compared to Nifty in the previous week and also formed a big bearish candle on a weekly scale. The immediate resistance is placed at 22500 levels. Immediate support is pegged at 18600 and below that, it may drift to 17500 levels.

Author: Mr.Nilesh Ramesh Jain, Derivative and Technical Analyst (Investment Services), 20th March 2020


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