Weekly Technical Outlook - NIFTY AUTO : 11270.25 weekly change (+3.26%) By GEPL Capital
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NIFTY AUTO : 11270.25 weekly change (+3.26%)
Observation
* Nifty AUTO after correction from the highs of 12140 took support at the 38.2% Fibonacci retracement level (9188) level.
* On the weekly charts the index is on the verge of a Cup & Handle pattern breaking which indicates a trend reversal.
* In the current week the index formed a Bullish candle with a long lower shadow and ended above the 20 week SMA (10921).
* The RSI indicator on weekly time frame has also given a breakout and is sustaining above the 50 mark indicating bullish momentum in the counter.
Inference & Expectations
* On the mid term charts Nifty AUTO is moving higher after forming a reversal pattern.
* The price action on all the time frame charts suggests that there is a possibility of an upside from current levels.
* We expect that the prices can move higher towards 11850 (Multiple Touch Points) followed by 12140 levels (Swing High).
* Going ahead 10800 will act as a strong support for the index.
NIFTY PSE : 3959.60 weekly change (-3.20%)
Observation
* For past 5 weeks Nifty PSE is moving with lower high and lower lows formation.
* On the weekly charts we can observe that the index has formed a double top formation at the 4500 mark.
* In the current week the index moved lower after facing resistance at the 20 week SMA (4121).
* RSI plotted on the weekly timeframe has dipped and is sustaining below the 50 mark.
Inference & Expectations
* The NIFTY PSE has breached and sustained below its previous month’s low (4102).
* The prices action and the technical parameters mentioned above point towards the possibility of short-term bearish momentum to continue.
* Going ahead a break below 3900 can drag the prices towards 3650 - 3700 zone (Multiple touch points)
* On the higher side index can face resistance at 4100 level.
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