Market Outlook for the week

NIFTY remained under pressure in the week gone by and also provided breakdown from its rising wedge pattern on the weekly scale. The support of the rising trend line of the wedge pattern was placed at 11,000. Now, if we see any follow-up selling then downside towards 10,650 cannot be ruled out. Although, the momentum indicator RSI has reached the oversold territory of 25 hints of some pullback towards 11200.

The overall trend for Nifty continues to remain negative until it reclaims 11,400 marks on the higher side. In the coming truncated week, we expect some consolidation in the range of 10700-11200.

On the derivative front, Call writers are scattered among a majority of the OTM strikes from 11,000 to 11,500 strikes, whereas put writers are almost equally divided among 10,500 and 10,900 strikes. F&O data indicates that a decisive break below 10,900 could take Nifty towards 10,700 and then 10,500.

The sentiment indicator “INDIAVIX” surged 12% to end at a 9-month high of 26 levels, which is a major concern for the bull and it has to cool down below 20 levels to give comfort to the bulls.

BANKNIFTY underperformed in the previous week compared to Nifty and also broke its psychological support of 28,000 level. The next support is now pegged at 27,100 and below that, it may drift to 26,500 levels. Resistance is placed at 28,500 levels.

Author: Mr.Nilesh Ramesh Jain, Derivative and Technical Analyst (Investment Services), 6th March 2020


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