Weekly Market Outlook for 13 Mar to 17 Mar

Our markets recovered gradually from the recent lows of 17250 to 17800, but it witnessed selling pressure from the resistance of 17800 on the weekly expiry day. The negative cues from the U.S. markets then led to a gap down opening in Friday’s session and the index ended the week tad above 17400 with a weekly loss of a percent.

Nifty Today:

The recent recovery from the lows of 17250 seemed to be a stronger one as the broader market participation was seen. However, it did not last long as the ’89 EMA’ resistance was around 17800 and from that level we witnessed selling pressure in last couple of sessions. Now last time, Nifty had corrected from the high of 18134 in mid-February and this time the index has corrected from 17800 level which indicates a continuation of the ‘Lower Top’ structure. Now the market structure will change only when this recent high of 17800 gets surpassed. On the other hand, the swing low of 17250-17300 continues to be a strong support for the short term. A breach of this support will result in continuation of lower top lower bottom, else we could just see the index consolidating within this broad range of 17250-17800. If we look at the derivatives data, the recent pullback from 17250 to 17800 was majorly due to short covering as FII’s had trimmed some of their short positions which were short heavy. However, they formed some short positions again which is negative for the markets. 

Global markets spoiled momentum, a ‘Lower Top’ formed at 17800

Considering the above data, it seems that our markets could see some time-wise correction within this broad range. 17250 will be seen as important support which if breached, then we could see further selling pressure towards 17000-16900. On the flipside, the pullback rallies would see selling pressure until the index breaks above 17800 which would now be seen as a trend changing level. Traders are advised to trade with a stock specific approach within this range and keep a watch on the global markets which are likely to dictate the near term trend.

Nifty & Bank Nifty Levels: