Weekend Views On Nifty for March 23 - Manoj Bhagra

Another week goes by and now as we enter into the derivatives expiry week, things would get a bit volatile. Nifty has given some good points to the longs and equally frustrating moments to the shorts. The triangle on the weekly chart below is still in play, albeit this pullback is shaking the faith of quite a few bears. The LH and LL sequence is still on. The price on the weekly has closed just shy of the 20-period MA at 2823 (Shorts should have tight stops between 2835/50). I personally would like to hold a bullish bias if I see a bullish divergence on the MACD. I have annotated the chart with ABC move in MACD where C is still far from reality, nevertheless a possibility.

The Daily chart shows the broad range that we we have been in, for the last 5 months. Between this range, there are smaller ranges (right now 2680/2880 is in play with 2700 as important pivot).

Nifty has been struggling with the 20- and 50-period MA. As of now we are still moving in a downward channel and the lower highs and lower lows are also clearly visible. The RSI is again at those precarious levels from where we often pulled back after making tops. 2835/50 remain a good resistance on the daily chart whereas the support lies at 2715/2700/2680.

This brings us to the hourly chart, which is the only chart showing a bullish trend, thus making the Nifty short-term up (remember it is Weekly and Daily down). The gap-down resistance marked in red has held well so far. As for the supports, shaded in yellow, are at Fibonacci confluences, the first one at 2765/55 has the 200-period MA just lined below it with 50 not far below either. The second line of defense is at 2715/2700 level. What is more intriguing is that there is large gap below (shaded in blue) which remains untested and unfilled. I personally feel this ought to be tested and partially filled.


"An ounce of action is worth a ton of theory." Friedrich Engels