Week Ahead: Expect further upmove in Nifty for the next 2-3 weeks | More upside for the market for next/coming weeks| Indianotes.com
Weekly Timeframe: Nifty continued its follow-through weakness during this week, but was able to witness sharp lower levels recovery during later part of this week. Nifty erased the most of its weekly loss and closed the week lower by around 0.37%, as per w-o-w basis.
– We observe a formation of hammer type candle pattern during this week (small body with long lower shadow), which is indicating a sharp comeback of bulls from the lower levels. As per the candlestick theory, the hammer is a significant bottom reversal pattern and is formed at lows after a reasonable declines. Hence, this could be a positive indication for the market ahead.
– Nifty held above the key lower support of around 10,150 levels (orange dashed line) during this week as per the concept of change in polarity. The formation of reversal pattern (hammer) at the important support area could mean more upside for the market for next/coming weeks.
– The weekly momentum oscillator like 14 period RSI has now slid down to the crucial upper area of 60 levels. As per the formulation of RSI, its turning up from near 60-65 levels could mean possibility of sharp upside momentum in the underlying. Previous couple of turn ups of weekly RSI and subsequent sharp upmove in Nifty is marked in X.
– The sharp comeback of bulls from the lows is intact and Nifty is placed to show more upside for near term. Any intraweek/mid-week corrections could be short lived and could be a buy on dips opportunity in the market.
– The pattern of time equality, formation of reversal pattern as per weekly timeframe and the indications of momentum oscillator (weekly RSI) are all pointing towards further upmove in Nifty for the next 2-3 weeks.
– The upside target to be watched is around 10,625 levels, which is 1.382% projection and this could be achieved in the next 2-3 weeks. Immediate supports to be watched is around 10,230-200 levels.
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