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NIFTY PHARMA : 13797.10 weekly change (2.34%)

Observation

* Nifty PHARMA moved lower after testing the high of 14938 in the month of October 2021. the profit booking spree pushed the index lower towards 13152 which is around 50% retracement level of the rise from 11280-14938.

* On the weekly chart we can see that the index has formed bullish candle with a long lower wick, indicating good buying interest has happened near 13152 levels.

* On the daily chart we can see that the prices have been forming a higher high higher low pattern since the past couple of sessions, the prices also recaptured and sustained above the 200 Day SMA (13701) which shows positive undertone of the sector.

* The RSI plotted on the weekly time frame can be seen forming a bullish hinge near the 40 mark and moving higher, indicating increasing bullish momentum on the medium term charts.

* Going ahead the 14200 (20 Week SMA) will act as a make or break level. If the prices breach above this level, we might see the prices move higher towards the 14938 mark (Life Time High) beyond which we might see the prices move higher towards 15582 (61.8% extension level of the rise from 11000-14938 projected from 13152).

* The 13152 (Weekly low) will act as a key support level, if the prices breach below the 13152 mark we might see the price move lower towards the 12375 (Multiple touch point level).

Inference & Expectations

* The NIFTY PHARMA has been moving in a corrective phase ever since the prices tested the life time high of 14938. 

* The price action on short and the medium term charts suggests that the prices are currently bouncing off the lower edge of the consolidation.

* The technical parameters mentioned above point towards the possibility of a trend reversal.

* Going ahead we expect the prices to head towards the 14200 mark, if the prices breach above the 14200 mark, we might see the prices move higher towards the 14938 and 15582 levels respectively.

* The RED FLAG level to watch for the index in the sessions to come is weekly low of 13152, if the prices breach below this level we can assume that the correction might continue and we can expect the prices to move lower towards the 12375 level.

NIFTY FIN SERVICES: 17614.70 weekly change (-5.33%)

Observation

* On the monthly time frame, the NIFTY FIN SERVICE seems to have halted its higher high higher low pattern, at the 1st glance one can actually be forgiven for considering the candle as the bearish engulfing pattern.

* On the weekly time frame, the prices can be seen forming a lower low lower high pattern for the past 5 weeks. In the week that passed by the index not only broke but also closed below the 20 Week SMA for the 1st time since May 2021.

* Currently the prices seem to be moving lower towards the weekly lower Bollinger band.

* On the indicator front, the RSI plotted on the weekly time closed just below the 50 mark, indicating increasing bearish momentum in the prices.

* Going ahead 16995 (Multiple touch point level and also the 23.6% retracement level of the rise from 7984-19778) will act as a support level, if the prices breach below the 16995 mark, we might see the prices move lower towards the 16330 (Multiple touch point level, Lower Bollinger Band level).

* The previous week high of 18691 will act as a key resistance level, if the prices breach above this level, we might see the prices move higher towards 19778 (Life Time high).

Inference & Expectations

* NIFTY FIN SERVICE from a long term point of view seems to have halted its up move.

* The price action on the medium and the short term charts points towards the possibility of the prices moving in a corrective phase.

* Going ahead the key support level is placed at 16995. if the prices breach below this level, the correction will accelerate and we might see the prices move lower towards the 16330 mark.

* The above analysis will stand negated if the prices breach above the 18691 mark, post which we might see the prices resume its up move and test the 19778 mark and the eventually move towards the fresh life time highs.

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