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NIFTY ENERGY: 19942.45 weekly change (3.07%)

Observation

* On the monthly time frame we can see that the NIFTY ENERGY has witnessed a steep rally that took the index from 9750 in March 2020 to 21066 in June 2021.

.* On the weekly chart we can see that the prices have been moving higher in a well channelized manner. This channel has been in placed since July 2020.

* Also the lower trend line of the channel has been acted as support for the prices since October 2020. This trend line is also placed close to the 20 Week SMA, thus one can consider this as a support cluster rather than a stand alone support.

* On the indicator front the RSI plotted on the daily time frame can be seen placed above the 50 Mark since May 2020, indicating presence of bullish momentum in the trend from a long term perspective. Currently it is moving higher towards the higher level after forming a bullish hinge near the 50 mark indicating, that the bulls are gaining momentum after a fair bit of correction.

* On the upside 21066 (previous swing high and the 38.2% extension level of the rise from 9750- 19907 projected from 17159) will act as a key resistance level, if this level breaches we might see the prices will move higher towards 22238 (50% extension level of the rise from 9750-19907 projected from 17159)

* The Key support level is placed at 19305-19134 (The 20 Week SMA and the Weekly low), if the prices breach below the 19134 mark, we would be cautious as it would breach below a support cluster of the 20 Week SMA and the lower trend line of the channel and we might see the prices move lower towards the 5 week low of 18803 levels

Inference & Expectations

* NIFTY ENERGY has been in a long term bullish trend.

* The price action on short and the medium term charts suggests that the prices have ended the corrective phase and are preparing to move higher .

* We expect this momentum buildup to take the prices higher towards the 21066 mark, if this level is breached we might see the prices move higher towards 22238 levels.

* A strong support is placed at 19134, a breach below this level will raise a red flag. If the prices breach and sustain below the 19134 mark we might see the prices move lower towards 18803 levels.

NIFTY AUTO: 9793.85 weekly change (-3.42%)

Observation

* On the monthly time frame, the NIFTY AUTO seems to have taken a break after a rally from 4452- 11093 levels.

* On the weekly chart, we can see that the prices have been moving in a range for the past few weeks. The broader range of the index is 11093-9345 levels.

* On the weekly time frame we have shown the Bollinger bands, wherein we can see that the prices moved below the 20 Weeks SMA in the last couple of weeks. In the current week, the prices maintained its Lower Top Lower Bottom formation and also sustained below 20 Week SMA and seems to be moving lower towards the lower Bollinger bands.

* On the indicator front, RSI plotted on the weekly time frame can be seen moving lower below the 50 mark, indicating that the bears have taken control of the trend.

* Going ahead the 9345 (Swing Low) will be the level to watch for, if this level is breached we might see the prices test the 8540 (December 2020 Low).

* The weekly high of 10209 (2 Week High & 20 week SMA) will act as a key resistance level going ahead. If the prices breach above this level, we can expect the prices to move higher towards the 10914 mark (June 2021 High).

Inference & Expectations

* NIFTY Auto on the higher time seems to have halted its up move.

* On the weekly chart the prices have entered in a corrective phase.

* From a medium term and short term perspective the prices seem to be gaining bearish momentum and moving lower.

* We expect this momentum to take the prices lower towards the 9345, if the prices breach below the 9345 mark, we might see the prices move lower and test the 8540 level.

* The above analysis will hold true as long as the prices remain below the 2 Week high of 10209. If the prices breaks and sustain above the 10209 mark we might see the prices move higher towards the 10914 mark.

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