For the most part, it was a difficult week for Indian stocks, with markets fighting four out of the five days to maintain their head above the important 200-DMA, which is now at 17404. If not for Friday’s big increase in the Indices, the week would have been on course to end negatively. The trading range of the markets remained constrained due to the overall drop in volatility. In contrast to the previous week, when the Nifty fluctuated within a range of 582.55 points, the index moved in.The range is 389.55 points. Yet, while keeping its head above the crucial 200-day moving average, the main index concluded the week with a net gain of 128.55 points (+0.74%).
The upcoming week will be cut short; Holi will cause Tuesday to be a trading holiday. The significance of VIX levels has reemerged, and the India VIX is currently at one of its lowest levels in recent memory. In the preceding week, the India VIX fell by 14.13% once again to reach 12.18. Again, this is something that calls for prudence. When we approach the markets, we must keep one eye on the volatility since such low levels of volatility show the market players’ complacency and frequently result in a nasty shock to the indexes.
So upcoming week will be cut short; Holi will also cause Tuesday to be a trading holiday. The significance of Volatility levels has reemerged, and the India VIX was currently at one of its lowest levels in recent memory. In the preceding week, the India VIX fell by 14.13% once again to reach 12.18. Again, this is something that calls for prudence. When we approach the markets, we must keep one eye on the volatility since such low levels of volatility show the market players’ complacency and frequently result in a nasty shock to the indexes.
Apart from that, from a technical standpoint, Nifty has found support on a falling trend line that also corresponds with the 50-Week MA, which is now around 17345. On a closing basis, this level includes an immediate change for the Nifty. The coming week is anticipated to begin quietly; the levels of 17650 and 17800 will likely function as resistance levels. The supports are located at 17350 and 17180. The weekly RSI is 47.68, remaining neutral and showing no divergence from the price. The weekly MACD has turned negative and is trading below the signal line.
The weeklong chart pattern analysis reveals that the Nifty has established a modest falling channel. Apart from that, the index has found help on a falling trend line, which runs from the high point of 18350 to the successive lower peaks. This pattern support also corresponds to the 50-Week MA, which is now at 17345. As a result, the 17350-17400 zone is an immediate support zone for the Nifty.
Overall, the steep drop in volatility over the preceding week, with the India VIX breaking the most recent low mark observed in early February, is reason for alarm. Although it may not cause immediate harm, chronically low levels of volatility indicate market players’ complacency. Any increase in the India Volatile Index will have a negative impact on the markets as a whole. Even if there is no substantial decrease, it is potential of spiking markets in the short run. It is strongly advised to retain leveraged exposure at very low levels and to remain invested in stocks with low beta and rising relative strength. With the next shortened week, it is best to be careful.
The examination of Relative Rotation Graphs (RRG) reveals that the NIFTY PSE, Auto, FMCG, and IT indices are all solidly positioned inside the leading sector. The MidCap 100 Index has also entered the first quadrant. These sectors are anticipated to be resilient and outperform the larger NIFTY500 Index.
The Nifty Infrastructure index has entered the bearish zone. Apart from that, the Bank Nifty, Metals, Services Industry, Financial, Commodities, and PSU Bank indexes are all in the red zone.
Together with the Media Index, the Nifty Energy Index is found to be significantly trailing in the lagging quadrant. It could nonetheless do comparatively worse than the larger markets. The Realty Index is likewise located in the trailing quadrant; it is being observed to be getting relative velocity in comparison to the larger markets.
The Nifty Consumption Index and the Pharma Index are both in the improving quadrant. In comparison to the larger Nifty500 index, these two indexes are deemed to be somewhat losing relative momentum.
