A Suresh Kumar Iyer, Technical Analyst, Asit C Mehta Investment Interrmediates while commenting on the market said, ``the Nifty made a range bound move in the early part of the week with a negative bias. During Wednesday and Thursday the fall was much more. The sudden reversal on Friday wiped of all the early looses and made the Nifty to close in green on a weekly closing basis. The global market cues and the inflation which was well below the market expectation triggered the rally. The Nifty opened at 4,317.95 and made a high of 4,398.80. It made a low of 4,201.85 and closed at 4,360.The Nifty gained 0.75 % on a weekly closing basis. The expiry was a bit smooth. The volume in Nifty futures and other segments improved while comparing with the previous week. The September futures were trading with the marginal premium of 4 points. ``

In the daily charts, during the fall, the Nifty breached the 50 day `SMA` for a day. However, the next day sharp reversal made the Nifty to closes above 5, 10 and 50 day `SMA`. The same way, the Nifty closed above 13 and 34 day `EMA`. The RSI in a fresh buy mode. The faster line of MACD is slightly below the zero mark. The further rise will make upward reversal in MACD too. Both the stochastic are in buy mode after reaching the oversold zone. The swing trade became neutral from negative mode. However, the ADX is in negative mode.

In the daily charts, the Nifty formed a reversal pattern which needs follow up confirmation. We mentioned in the last weekly write up, 4,220 (with 1 % variation on either side.). In line with that, the Nifty formed a low at 4,202 (in many fronts) and reversed. The reversal gains importance and strength from the place where it reversed. The short term view is bullish. However, the Nifty will need more energy to clear the zone of 4,399-4,448 in the short term.

In the weekly charts, the Nifty formed a reversal pattern which needs follow up confirmation. The Nifty closed well above the 5 week `SMA`. However, it is facing resistance near to the 10 week `SMA`. In the RSI, the line touches the signal line and reversed upwards, which is short term bullish sign. The 14, 3, 3 stochastic is in afresh buy mode. However, the 5, 3, 3 stochastic is still in sell mode. The swing trade becomes negative. The ADX is in sell mode. The MACD is in buy mode. Though the under current is bullish, somewhat we need more clarity before taking any call.

In the monthly charts, the trend line support near to 3,798. The Nifty got support at the trend line and started to move. This is somewhat positive sign.

Outlook for the Week

Short term bullish with more choppy sessions.

Based on the above rationale, the Nifty is expected to continue its upward momentum with or without early consolidation. The 4,399-4,448 may act as a tough resistance zone. Once this zone gets cleared, the medium term view will get a fresh upward momentum. This view will get negated if the Nifty makes any weekly closing below 4,246. For this week, the Nifty has resistance at 4,399-4,448(tough for short as well as medium term), 4,499, 4,515(on a weekly closing basis), 4,563 and 4,650(very strong for medium term).The Nifty has support at 4,350, 4,315- 4,326, 4,269(strong for intra week), 4,201 4,248, 4,179-4,202(strong for short term), 3,920(strong for medium term).

Strategy

One should hold or add long positions on declines, if any.

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