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NIFTY FMCG: 36287.15 weekly change (1.80%)

Observation

* On the monthly time frame the NIFTY FMCG index has been in a up trend since 2009. Some correction was seen March 2020 post which it resumed its higher high higher low pattern indicating that the long term trend of the index is strongly bullish.

* On the weekly time frame we can see that the Index has formed ‘CIP formation’ near 32000 level after giving a breakout in Dec 2020 and also the 20 Week SMA is acting as a strong support, the prices have been finding support near the 20 week SMA with mild whipsaws and moving higher, which reinforces our bullish view.

* Weekly breakout above consolidation happened last week; however the confirmation came in this week with a move above the previous week HIGH accompanied by prices making all time HIGHs.

* The Bollinger bands plotted on the weekly time frame can be seen expanding as the prices test the upper Bollinger bands, indicating increasing volatility for the positive side, from a medium term perspective.

* On the indicator front the MACD plotted on the weekly time frame moved above the zero line and has managed to sustain it, pointing towards the presence of bullishness in the medium trend. The RSI plotted on the weekly time frame can be seen placed above the 50 mark and moving higher, indicating presence of momentum in the bullish trend.

* On the upside 37052 (78.6% extension of the rise 28969-35000 projected from 32312) will act as a resistance level above which we can expect the 38343 and 39971 (100% and 127% extension of the rise 28969-35000 projected from 32312)

* 35258-35000 (weekly low and multiple touch point level) will act as a key support level, if this is breached we can expect 34300 (20 week SMA) to be tested.

Inference & Expectations

* NIFTY FMCG index from a long term point of view is in a strong bullish phase.

* The technical parameters mentioned in the observations part point towards the presence of bullishness and increasing momentum in the index.

* We expect the index to move higher and test the 37052 mark immediately. If the index sustains above this level the gates towards the 38343 and 39971 levels will open up.

* The key support zone of the index is placed at 35258- 35000, expect this level to be the RED FLAG level, if the prices breach below this level we can expect the index to move lower towards the 34300 mark.

NIFTY METAL: 5048.65 weekly change (-6.62%)

Observation

* On the monthly time frame the NIFTY METAL index has been in a bullish phase, and has managed to form a higher low pattern.

* However, on the weekly time frame we witnessed that the index halted its rally near the 5524 mark and it has also formed ‘Double Top’ formation near 52 week high which is a reversal pattern.

* The Momentum indicator like RSI plotted on a weekly charts is moving down from overbought zone with a ‘Bearish Diversion’ which indicate some caution for coming days.

* The weekly stochastic is also forming a bearish crossover near the overbought level, indicating the increasing bearish momentum in the prices.

* Going ahead the weekly low and the previous month low of 4848-4781 will a crucial level to watch out for, if the index breaks below this level, we can expect the index to move lower and the test the 4580-4423 (38.2% retracement level of the rise from 3062-5524 and the 20 week SMA)

* On the flip side, if the index manages to hold the 4781 mark, we can expect the index to move higher and test the 5420-5524 (weekly high and previous swing high), if the index manages to break above the 5524 mark we can expect the index to test life time highs and move towards 5800 and 6089 (38.2% and 50% extension level of the rise from 3062-5524 projected 4858)

Inference & Expectations

* From a long term perspective the index has maintained its higher high higher low pattern, indicating that the long term trend of the index is bullish.

* The medium to short term charts tell a different story and point towards the possibility of a correction after a massive rally from 3062 - 5524 levels but confirmation is yet to come.

* Looking at the price action of the past few weeks, currently the trend is indecisive but the 4781 level will be the level to watch for in the coming weeks, a break below this levels means the formation of bearish engulfing on the monthly time frame, and we can expect the prices to test 4580 and 4423 mark.

* On the flip side if the 4781 is held and the index moves above the 5420 level, we can assume that the correction is completed and the prices might move higher towards the 5524 followed by 5800 and 6089 mark eventually.

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