Weekly Market Outlook for 19 June to 23 June

Nifty continued its upmove in the week gone by and surpassed the 18800 mark at close. Nifty is just a kissing distance away from previous high which was at 18887.60, but it has ended the week at a new closing high with weekly gains of almost one and a half percent.

Nifty Today:

Nifty has been trading within a rising channel and the supports remain intact inspite of some in between volatility which we witnessed on Thursday. However, on the weekly expiry day too, the banking space witnessed some sell-off but the Nifty index kept its support intact and the broader markets too were positive as the Midcap index continued to hit new record highs. The uptrend in the Nifty index remains intact as it has been trading in a rising channel and the support of the channel is now placed around 18670. This will be seen as immediate support for the coming week and only a break below this will then result in profit booking. Below this support, the levels to watch out then will be the ’20 DEMA’ support at 18550 followed by the swing low support at 18450. Hence, swing traders can continue to ride this trend with a stoploss below 18650 now. The Bank Nifty index breached its 20 DEMA support on Thursday after about two and a half months. However, it was just on the weekly expiry day and the index witnessed a sharp pullback on Friday. Now, the follow up move will be important for the banking index as Friday’s high is the 61.8% retracement level on the hourly chart. Thus, 44100 is the immediate resistance followed by the recent swing high in the 44400-44500 range. The structure for the Nifty index is much clearer than the banking index and hence traders are advised to better look for trading opportunities in the outperforming index with the mentioned stoploss.

                                                                      Nifty ends at record closing highs   

The Midcap index has outperformed significantly in the last couple of months but has now reached an important zone. The reciprocal retracement theory indicates resistance in the zone of 35200-35300 and the momentum readings are in a highly overbought zone. To cool-off the overbought set ups, we may see some pullback move in the near term in the midcap space. Hence, the risk reward ratio is not favourable at current juncture and thus, traders are advised to keep a ‘Buy on decline’ approach rather than chasing stocks in the overbought zone.

Nifty, Bank Nifty Levels and FINNIFTY Levels:

​