Weekly Market Outlook for 21 Nov to 25 Nov

In the week gone by, Nifty consolidated within a narrow range throughout the week, but it managed to hold on to its important support inspite of weak market breadth. Amidst some stock specific momentum on both the sides of the trade, the index ended the week tad above 18300 with a marginal loss.

Nifty Today:

In last few trading sessions, Nifty has consolidated in a narrow range which seems to be a time-wise correction within an uptrend. The ’20 DEMA’ support for Nifty is placed around 18050 while the momentum readings too are still in buy mode and have not given any negative crossover since last few weeks. If we look at the derivatives data, the long positions in the index are still intact and FII’s too have the majority of their positions on the long side in the index futures segment. In options segment, 18300-18200 strike has decent open interest outstanding which indicates a good support range for now. The global factors such as U.S. bond yields and the Dollar Index which had recently cooled-off from the highs has not seen any upmove again. Considering all these factors, we advise traders to continue to trade with a positive bias as the index could rally higher in the coming week. In Nifty, 18200 and 18050 are the support levels as mentioned above and till these supports are intact, intraday declines are likely to get bought into. On the flipside, 18400-18450 is the immediate hurdle where the index has resisted in last one week. If the index resumes the uptrend, then these hurdles could be surpassed and Nifty could march towards a new record high soon. The positive structure would get negated if the index breaks the support zone if 18050-18000 and hence one should placed stoploss on long positions below the same.

Nifty could clock new record high till its keeps its crucial support intact

The only worry is the lack of participation from the broader markets as the Nifty Midcap index has been diverging and has not moved along the benchmark. Hence, traders should be selective in picking stocks and until we see a breakout in the Midcap index, it is better to ride the trend with the large cap stocks which have been leading the indices and avoid bottom fishing in the underperforming names.

Nifty & Bank Nifty Levels: