Nifty tried picking upside momentum through the week but failed until the last day of the week, which was also a monthly, quarterly and yearly closing. Optically it closed above 17300 comfortably breaking through the channel that this correction has laid since October ATH on daily timeframe.
BankNifty too oscillated through the week before making a strong gap-up move on Friday and failed to build with upside momentum. The broader market also just performed as per the frontliners except the small cap index which rallied more than 4% for the week. As expected CNXIT performed well and contributed to Nifty’s gains.
Nifty: More convincing needed
Considering the price action there is still more convincing needed from Nifty to establish the breakout. It could be because of the volume picture, or quarterly and yearly closing that saw the move on Friday. While on Daily chart it looks like an attempt for breakout on weekly the picture in most of the indices is more of a consolidation to the upper end of the channel. So on Nifty the follow up action needs to be looked at closely for bullish or bearish tone. So 17100-17600 is the range that could play out as we enter the earnings and budget mode for the market.
Nifty (W)
As I mentioned last week I will be sharing a consolidated long-term, med-term and short-term rating system that I follow, here is a snapshot of how the ratings have changed based on Nifty’s movements. If you look at the current ongoing correction we entered the zone of interest (+2 to -2) in the first fall to 16600 area and then again broke that level and touched 16400 area while the rating just touched the same level and bounced. It touched the low of .6 on 22nd Nov and again on 22 Dec. Its an interesting tool to keep looking at the state of the market based on a LT/MT/ST composite rating framework. Right now we are at 3.9 rating as of Friday close on this system.
Rating System(D)
Also, since it was a Quarterly close , its important to just have a glance at what Q4 of 2021 looks like. As you can see we have made an indecisive candle this quarter after ATH, so 17550-18000 area is an important levels for Bulls to capture to continue this long term uptrend and go pass ATH, while on the downside the low of last Qtr becomes an important level now.
Nifty (Qtr)
BankNifty : More work to do
As mentioned last week, BankNifty is on the edge and if it has to turn it should do that now, while the turn took place last week but it didn’t get much momentum. So it looks to be pretty straight forward consolidation in a ranged market. While 36000 remains the pressure point on upside any break of 35000 will create a strong momentum towards downside. Lesser the time it spends on this lower end of the channel better it will be for the bulls.
BankNifty (W)
Sector in Focus: Nifty Pharma
This sector after a breakout and consolidation has given a strong monthly close. Giving an indication that this sector should be on a watch for weeks to come. Keep an eye on some of the relatively strong names within this sector they are looking good to watch.
Nifty Pharma Index (M)
While Pharma should be on radar for few weeks to come, NiftyIT and Capital Goods should continue to be on the radar, especially NiftyIT.
That’s it for this edition of Weekly Round up, Hope this will help you in your research on markets. This post is a bit lengthy one to cover more detail about the Nifty analysis as we step into 2022. As always I will be very happy to receive your inputs and feedback.
Best wishes to you and your family to have a great and joyful 2022.
Thank you for your attention. Have a great opening week of 2022
Anupam- A Little About Market
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Opinions and views provided in this weekly round up are for educational purposes and should not be construed as investing or trading advice.