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Week Ahead: Sell on rise opportunity for next week - IndiaNotes.com
Week Ahead: Sell on rise opportunity for next week
HDFC Sec | Published: 10 Feb, 2018  | Source : IndiaNotes.com

Weekly Timeframe: Nifty shifted into sharp follow-through weakness this week and closed the week lower by around 2.84%, as per w-o-w basis


- A long range bear candle has been formed this week with rare opening down side gap. The formation of opening downside gap as per weekly timeframe is rare and this down gap could be indicating a bearish break away gap


- Normally, bearish break away gaps are formed after a sustained up trend and they are usually part of important top reversal patterns. Hence, last week’s high of 11,171 is going to be an important top for the Nifty


- The formation of this week’s long lower and upper shadow is indicating heightened volatility in the market with weak bias. We observe emergence of minor buying from near the key lower support of around 10,350-10,400 levels (20day EMAgreen curvy line and brown dashed up trend line, connecting previous swing lows)


- This above said support could act as temporary halt in downside momentum in Nifty around 10,350 levels, but eventually this support is going to be broken on the downside


- Weekly 14 period RSI is at the key lower area of 55 levels. As per the bullish high low range theory of RSI (75-40 levels), the weekly RSI is could slide down to the lower 40 levels over the period of time. This expected action could mean possibility of sustained down trend for the Nifty ahead


Summing Up:


- The near term trend of Nifty continues to be down and a top reversal in Nifty seems to have confirmed as per weekly timeframe. There is a possibility of minor halt in downside momentum or an attempt of minor upside bounce from near 10,350-10,400 levels, but eventually this support could be broken on the down side over the next couple of weeks


- Any attempt of upside bounce is going to be a sell on rise opportunity for next week and the downside targets to be watched is around 10,000 mark for the next couple of weeks

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.