Weekly Technical Outlook - NIFTY PSE : 3764.30 weekly change (-8.64%) By GEPL Capital
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NIFTY PSE : 3764.30 weekly change (-8.64%)
Observation
* NIFTY PSE has been moving in a range between 3785- 4500 for the past 8 months.
* On the weekly charts, the Index has breached 8 month’s consolidation on the downside.
* On the daily charts we can see a breakdown of Head and Shoulder pattern with a big bearish candle.
* Prices also breached its upward slopping trend line which was well respected since December 2021 indicating negative undertone of the sector.
* The RSI indicator on weekly charts is trading below the 50 mark indicating bearish momentum.
Inference & Expectations
* The NIFTY PSE has shown a break down with a strong negative momentum.
* The index can move lower towards the 3443 level, a break below which it can face selling pressure and extend the downside towards 3000 level (multiple touch points & 61.8.% Fibonacci retracement).
* Our bearish view will be negated if the level of 4165 is taken out on upside.
NIFTY ENERGY : 24155.15 weekly change (-6.41%)
Observation
* NIFTY ENERGY has given a breakdown from its upward slopping price channel which was respected since March 2020 lows.
* 20EMA which was acting as a support to prices, now is acting as a resistance to the prices.
* Prices on the Weekly chart have formed lower high, lower low formation.
* On the daily charts, the prices have been sustaining below 200 Day SMA since last couple of days.
* The RSI indicator on weekly charts is trading below the 50 mark indicating bearish momentum.
Inference & Expectations
* Prices has breached its long term channel pattern indicating a sign of concern.
* Till the Index trades below the 25210 level we expect the bearish momentum to continue.
* Going ahead the index can move lower towards 21850 mark. Our view will be negated if prices move on the upside above 25210 levels.
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