Nifty weekly Update.
Nifty closed positive for the week with a bullish candle as shown in the charts. This was observed after 5 weeks of bearish candlesticks. Broadly speaking, 19200 seems to be acting as support as of now.
This level assumes significance because it is close to
- 23.6% retracement level to previous rally.
- 10 WEMA.
- Weekly gap up (19201.70-19234.40) seen between weekly candle ending 30 June 2023 to 7 July.
- Lows for last 3 weeks.
If we see the weekly candle for week ending 25 th August, there is a big upper wick with high at 19585, which remains the level to watch out for going into next few weeks.
So important levels for us to watch out for going ahead are 19200 on downside and 19600 on upside. Markets have a mind of their own, so they may go above or below these levels, or might consolidate for a few weeks between these levels. My expectations are to see the markets go up gradually and once the overhead resistance is overcome, resume uptrend. ( One of the reasons is the double bottom breakout which got confirmed on Nifty weekly chart on break above 18880)
Also marked on the chart can be seen the expanding triangle like structure that existed between Sep 2021 to August 2022, a period of 11 months which left everyone clueless as to the direction of the overall markets. This was followed by a double bottom formation (marked within blue horizontal lines) at 16800 which got confirmed once the intervening peak at 18880 was crossed. Potential target if this double bottom pattern plays out is 20800 range.
As mentioned many times before, PSU stocks have shown tremendous resilience during weak markets in the past and now have started showing strong upmoves. Last week it was the turn of BHEL to do its bit.
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