Dalal Street Week Ahead: Tread Carefully! Corrective action can take Nifty to 19,000 levels
Nifty oscillated in a 537-point range over the past week. The headline index closed on a negative note, losing 518 points (-2.57%) on a weekly basis.
The monthly derivatives expiry is slated for next week, and the coming sessions are likely to stay influenced by rollover-centric activities. The level of 20,200 has now become an intermediate top for the Nifty; as long as this level is not taken out comprehensively, the markets will remain under consolidation and may even see minor corrective retreatments.
The index is at a support level of 50-DMA on the daily charts and may see a short-term technical rebound but on the higher-time frame charts, the index remains vulnerable to some more profit-taking bouts and corrective retracements.
Despite the corrective decline, the volatility index, as represented by India VIX, did not rise. In fact, it declined marginally by 2.20% to 10.66 on a weekly basis. This continues to keep the markets vulnerable to incremental corrective retrenchment.
The coming week may see a tentative start to the trade, with the levels of 19,850 and 19,990 to potentially act as resistance for the market.
The supports may come in at 19,500 and 19,380 levels.
The weekly RSI is at 61.45 and it shows a mild bearish divergence against the price. While the price made a higher high, the RSI did not, and this led to the development of a bearish divergence of RSI against the price. The weekly MACD is bullish and above the signal line.
