Nifty weekly technical outlook

The Nifty tested the highs of 5138, almost touching our short-term target (5140-5180) and sharply reacted on the expiry day. By
Friday morning, it tested the levels of 4800, although it bounced in late trade to close at 4941
• The weekly chart is displaying “Engulfing Bearish line”, which suggests bears are wresting control of the market from the bulls. The
high of the pattern at 5138, now remains a crucial upside resistance for the coming week or two
• On the daily charts, the Nifty has breached the 38.2% retracement of the current rally, although only on an intraday basis. However,
failure to hold above 4900 for the coming week may see prices dropping down to 4800-4770 area, which is the 61.8% retracement
of the rally. Further negative crossover of the RSI and stochastic oscillators suggests negative momentum
• On the higher side, 61.8% retracement of the past two day’s fall works out to 5015 levels and may be our first resistance point. We,
therefore, expect the Nifty to trade in the range of 5000-5020 levels on advances and 4800-4770 on declines with a negative bias.
We, therefore, suggest going short on rallies up to 5000 mark for downside targets of 4870/4800/4770. A change of view would be
warranted above the 5050 mark

Source : ICICIDirect