Dalal Street Week Ahead: Nifty may trade rangebound; adopt stock-specific approach

economictimes.indiatimes.com:

Nifty staged a major breakout by crossing above the previous high point of 18,887. This time, it was the fourth week in a row when the market extended its gains. This has also led to the market closing at its fresh record lifetime highs as well.

While some signs of mild consolidation appear on the shorter timeframe charts, Nifty stays in a firm uptrend post the breakout on the weekly charts. The trading range has expanded as Nifty oscillated in a 428-point range over the past five days. The headline index finally closed with a net gain of 180.50 points (+0.92%) on a weekly basis.

The breakout that Nifty achieved a month ago is a major one. This is evidenced by the strong upward momentum that the market has witnessed over the past four weeks. However, analysis of the shorter timeframe, i.e., daily charts, shows that the Nifty might be in for some ranged consolidation.

This translates into the week’s high point of 19,991.85 acting as a temporary resistance and a top for the market unless taken out convincingly. The volatility has also increased. India VIX edged higher by another 7.51% to 11.48.

Despite this surge, VIX stays near one of its lowest levels seen over the past months. The coming week also has a monthly derivatives expiry lined up. The days would remain influenced by rollover-centric activities.

The week is likely to see a tepid start, with the levels of 19,850 and 20,000 acting as potential resistance points. The supports come in at 19,610 and 19,470 levels. The weekly RSI is 73.51; it has formed a new 14-period high.

It stays neutral and does not show any divergence against the price. The weekly MACD is bullish and stays above the signal line. A candle resembling a “Shooting Star” has emerged on the charts.