Weekly Market Outlook for 15 May to 19 May

The benchmark consolidated within a range in the week gone by, but we did not see any selling pressure as the broader markets continued the momentum. Nifty witnessed support around 18200 level and ended the week above 18300.

Nifty Today:

Nifty consolidated within a range in last four trading sessions but the stock specific moves were positive. Due to divergences seen on the lower time frame chart in Nifty and its momentum readings, this consolidation could be seen as a time-wise correction as the important supports in the indices have not been breached. Nifty is trading in a rising channel on the hourly charts and the support for the same is placed around 18200. Nifty has managed to show pullback move from this support during the week and hence, will be seen as a sacrosanct for the coming week. Only if this support is breached, we could then see some pricewise correction towards the ’20 DEMA’ which is placed around 18000. However, traders are advised not to preempt any correction until support is breached and rather continue to trade with a positive bias. On the higher side, the resistance for Nifty will be seen around 18450-18500 followed by 18650. In the Bank Nifty index, the ’20 DEMA’ index has not been breached which is placed around 42780 now. So this would be seen as an important support and till this is intact, the uptrend remains intact. This index seems to be heading towards all-time high soon and hence, stock within this sector could see a good momentum.

                                                              Market uptrend intact, 18200 seen as immediate support

In the index futures segment, we have not seen any significant positions built in this series so far. The long positions for FIIs are around 47 percent while the Client segment has 50 percent positions on the long side and 50 percent on the short side. Being a strong trended phase, it seems that market participants are not willing to form any short positions and hence, there’s enough room for fresh long formations by these participants. This will limit the downside and hence in case of any dip in the market, we could again see buying interest at lower levels.

Nifty, Bank Nifty Levels and FINNIFTY Levels:

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