Nifty Weekly Technical Outlook for 05 Oct’15

Finally much anticipated Rate Cut announced by RBI and once again it gave a big surprise to street by cutting 50 BPS, as 25 BPS was very much discounted by the market, also 50 points rate cut was not expected. We very well know that it’s positive for Equity markets, but does it managed to change the technical scenario at all? Let’s consult our charts and see whether RBI has set the tone for Bottom or not. To read full report you need to Register here (it’s free) and if you are already registered then there no need to register again, you’ll shortly receive newsletter.

05 oct nifty outlook

Finally week ended with gains of 82.40 points or 1%. Technically if we see Nifty not even manage to move above previous weeks high of 8021.60, as cluster of resistances are placed in the vicinity of 8020-8060 levels. As of now weekly candle indicates buying interest from lower levels, however moving forward it need to decisively close above the previous weeks candles.

If we see there is no much difference between previous week and last week, moreover prices remained in the same range.

Technically, Nifty is struggling to surpass and sustain above Gap area created on 24 Aug and for bulls it will be real challenge.

Last week’s review – it is always prudent that not to trade on the third day of any move for a continuation of that move. If you have a missed bottom or top three day move against the trend is normal movement, so wait patiently for Monday’s closing, meanwhile one may initiate longs for small objective with small stop losses, like buy above 7885 keeping stop loss below 7840 for smaller objective… If on Monday NF manages to close above 7950 then it may set the tone for further upside.  As expected Monday remained quite volatile and finally Nifty ended sharply lower. The way in which Tuesday market moved, hardly anyone would have got a chance to initiate longs, and lastly week ended exactly at 7950.

Even during the last week it was very clear that bullish tone will only set above 7950 and now we are standing exactly on that point. So I would prefer to stay long only above 7950, stop should be placed below 7880, looking for upside of 8050 and if NF manages to sustain above 8050 then 8200 would be next level to watch for. What if market falls below 7880, in that case don’t turn aggressively bearish, wait for a while. So let’s keep finger cross and see whether we manage to test 8200 levels.

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