Weekly Market Outlook for 18th July to 22th July

The week gone by witnessed some consolidation phase for the markets as Nifty corrected and traded within a range, but held on above its important support levels. Nifty breached the 16000 mark during the week, but managed to end above it with a weekly loss of over a percent.

Nifty Today:

We witnessed some correction in Nifty during the week but the index has not breached its important support levels. It has retraced recent upmove from 15180 to 16270 by 38.2 percent and the rising trendline support around 15800 has also not been breached. On the lower time frame chart, a ‘Higher Top Higher Bottom’ structure is seen which is still valid and until the index breaks the important support of 15800, the near term outlook remains bullish. The Bank Nifty index showed relative underperformance on Friday, but this index too has a similar positive structure and the 20-day moving average support for the same is placed around 34360. 

                                  Short term trend remains positive as Nifty defends its crucial supports
 

The Midcap space outperformed the benchmark and ended the week with gains of a percent. This clearly indicates a buying interest in the broader markets and hence, stock specific action is likely to continue with a positive bias. In this week, we witnessed certain negative news flows with regards to inflation, global markets correction, FII’s selling in cash and derivatives segment and the rising Dollar Index. Inspite of all such news flows, the market has managed to hold on to its crucial supports which is a positive sign.

Any reversal or positive news from the global factors could then lead to a buying interest in equities and hence, we advise traders to trade with a positive bias till 15800 is intact. Only a break below 15800 will then lead to a resumption of downtrend and till then, one should be optimistic from a short term perspective. 

The immediate support for Nifty is placed in the range of 15900-15800 while on the higher side, we expect the index to rally towards 16270 followed by 16500 soon.