Nifty (weekly close approx. 10491.05):
This week Nifty was very range bound. The week begun with Monday sell-off which took Nifty towards the bottom end of the 10300-10600 range. However, bulls stepped in and Nifty closed approx c.75 higher from the day’s low. The next three days saw very range-bound activity in the index as Nifty moved more or less within 10350-10410 range. However on Friday, bulls pushed Nifty upwards towards the 10500 mark to close the week at the highest point, and more importantly above 20 week SMA. For last 3 weeks Nifty has defended this average on closing basis, in spite of intra-week breaches. This is a very important level to watch out going forward.
The daily RSI, CCI and Slow Stochastic indicators are close to the bottom of the normal range and seem to be turning up, while the daily ADX has picked up momentum. The hourly RSI is closed to top end of the range while the hourly CCI, Slow Stochastic are firmly into overbought zone. This indicates the possibility of a continued upward momentum. On Friday, Nifty closed above the 5 day high EMA and as long as Nifty remains above that, the possibility of further uptrend will remain intact.
Figure: Hourly Chart
Technical possibilities for upcoming week:
Next week Nifty may continue upward momentum if it stays above 5 day High EMA. On the upside 10640 (approx. 20 day SMA) should act as a crucial resistance. If Nifty maintains above that for couple of days then higher levels in Nifty can be seen. However a move below 5 day low EMA and an eventual breach of 10276 will open up more downside. This is a truncated week in India due to the festival of Holi and on Friday, USA will release Non Firm Payroll data. This will be a widely watched data and any surprise in this data may fuel up rate rise concerns and US bond yields may jump. Hence, carrying any position on Thursday would be very tricky for Indian traders and investors.
Figure: Weekly Chart
We are including the ELM level matrix for Nifty for Monday 26th February for your reference.