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NIFTY MIDCAP 100: 27124.75 weekly change (-1.72%)

Observation

* On the monthly time frame we can see that the NIFTY MIDCAP 100 is forming a strong red candle for the first time since April 2020.

* On the weekly time frame, we can see that the prices have been moving in a range for the past 8 weeks with mild whipsaws.

* On the weekly chart, we have shown an upward slopping trend line, which has been acting as support since September 2020. This trend line has always been placed close to the 20 Week SMA, and the prices seem to be finding support at that level and bouncing off the same.

* On the indicator front the MACD plotted on the weekly time frame can be seen forming a bearish crossover, indicating that the underlying trend of the index might be changing from a medium term perspective. The RSI plotted on the weekly chart can be seen moving lower towards the 50 mark after forming a bearish divergence with the prices, pointing towards the increasing bearish momentum for the short to medium term.

* On the downside 26806 (previous week low and a multiple touch point level) will act as a support level, if this level breaches we might see the prices will move lower towards 26099 (the trend line support 20 Week SMA and the 38.2% retracement level of the rise from 22480-28403)

* The weekly high of 27800 will act as a resistance level, if this level breaches we might see the index will test the 28403 (Life Time High).

Inference & Expectations

* NIFTY MIDCAP 100 after a long time has formed a strong bearish candle, pointing towards the possibility of the long term up move coming to a halt.

* The price action on short and the medium term charts suggests that the prices are currently in a corrective phase.

* The prices action in the medium term show increasing bearish momentum in the prices.

* Going Ahead the previous week low of 26806 will act as a make or break level, if we see a breach below the 26806 mark we might see a fall towards 26099 levels.

* On the upside we don’t expect the index to breach above the weekly high of 27800, However if the prices manage to breach above this level, we might see further up move towards it All Time High levels of 28403.

NIFTY SMALLCAP 100: 9850.90 weekly change (-3.42%)

Observation

* On the monthly time frame, we can see that the NIFTY SMALLCAP 100 formed a strong red candle and almost engulfed the previous week candle for the first time since April 2020.

* On the weekly chart, the prices have been moving between the 20 Week SMA and the upper Bollinger bands since June 2020. For the past 3 week the prices have been forming a lower low lower high pattern. Currently the prices placing at seven week’s low.

* On the daily chart, we can see the prices sustaining below the 50 Day SMA. Currently the prices are riding the lower Bollinger bands, the bands too can be seen expanding as the prices move lower, indicating expanding volatility on the shorter time frame as the prices move lower.

* On the indicator front, the MACD can be seen forming a bearish crossover and moving towards the zero line, pointing towards the possible turn in the trend. The RSI plotted on the weekly time frame can be seen moving towards the 50 mark after forming a bearish hinge near the overbought level indicting increasing bearish momentum in the prices.

* Going ahead the 9585 (38.2% correction level of the rise from 7827-10673) will be the level to watch for, if this level is breached we might see the prices test the 8914 (61.8% correction level of the rise from 7827-10673)

* The weekly high of 10207 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 10673 mark (Life Time High).

Inference & Expectations

* IFTY SMALLCAP 100 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 9585, if the prices breach below the 9585 mark, we might see the prices move lower and test the 8914 level. 

* The above analysis will hold true as long as the prices remain below the weekly high of 10200. If the prices breaks and sustain above the 10200 mark we might see the prices move higher towards the 10673 mark.

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