Nifty (weekly close approx. 10894.7):
This week Nifty opened Gap-up and continued upward journey with Banking and Tech sector providing leadership in this rally which is unfolding with Govt. budget round the corner. The rally got fresh momentum since early profit booking on the Wednesday. The Bank Nifty was more bullish compared to Nifty and gave a robust up-move after almost 6 months of tight ranged consolidation. The financial stocks have high weightage in Nifty and any run away rally in Bank Nifty is likely to pull Nifty in northwards direction.
Figure: Nifty Daily Chart
The daily CCI, RSI, Slow Stochastic are firmly in the over-bought region signaling a very bullish momentum. Even small dips are getting bought whenever the index is coming close to 5 day low EMA. The trademark of this week’s rally has been large-cap out performance over mid-cap. This may continue for some more time. Technically speaking 5 day low EMA is very crucial level going forward. Any close below 5 day low EMA will be the first sign of the rally getting challenged.
In hourly chart, Nifty has been given a fresh breakout in last hour of Friday. The hourly CCI is in the overbought zone and the hourly slow stochastic and hourly RSI are on the verge of breaking into overbought zone. The hourly ADX is also bottoming out. Overall, possibilities of a very bullish week ahead is quite high, especially the first half of the week.
Figure: Nifty Hourly Chart
Technical possibilities for upcoming week:
Nifty closed much above higher Bollinger band and 5 week High EMA in weekly chart. This opens possibilities for further follow-up rally. However we have to look for any loss of momentum in oscillators to identify early signs of reversal. Consistent close below 20 hour SMA will open possibilities for that kind of pause or reversal.
Figure: Nifty Weekly Chart
We are including the ELM level matrix for Nifty for Monday 22th January for your reference.
ELM Nifty matrix
Figure: ELM Nifty Level Matrix 22 Jan
You can view the Original Report here.
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