Sensex gained 363 points to close at 76,515 while Nifty 50 rose over 24 points to end the session below 23,898 on Friday.
Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty, options data as well as an index strategy for the upcoming week.
) Sensex, Nifty have fallen 1% this week as CAS lingers.
For the fourth consecutive week, the benchmark Nifty ended in negative territory. During the week, the index broke down from its rising channel on the daily chart, signaling a shift in the short-term trend. Escalating geopolitical tensions, rising US 10-year bond yields, and higher Brent crude prices continued to weigh on market sentiment.
The technical picture provides little evidence of a sustained recovery at this stage.
Nifty is comfortably trading below its short and long-term moving averages, while the 20, 50, and 100-day EMAs have started edging lower, indicating increasing bearish pressure.
The daily RSI is hovering around 40 and remains below its 9-day average, while the daily ADX has moved above 20 and is rising, suggesting that the prevailing trend is gaining strength.
That support zone lies in the 23,750-23,700 region. 8% Fibonacci retracement of the previous upmove from 23,070 to 24,774 is placed around this region. On the upside, the hurdle is placed in the zone of 24,150-24,200 as it is the confluence of 50 and 100-day EMA levels.
Sensex View: The benchmark index, Sensex, extended its weakness for the fourth consecutive week and has breached its rising channel formation on the daily chart, indicating a deterioration in short-term trend structure.
However, after registering a low of 76,135, the index witnessed a modest pullback.
Technically, the index is trading comfortably below its key moving averages, while the short-term moving averages have started to slope downward, reinforcing the negative bias.
The daily RSI is hovering near the 43 mark and remains below its 9-day average, suggesting subdued momentum.
Going forward, the 76,200-76,000 zone is expected to provide crucial support.
A decisive move below the 76,000 mark could accelerate the corrective phase, exposing the index to lower levels of 75,400 and subsequently 74,800 in the near term.
