Dalal Street Week Ahead: Nifty Analysis For February Third Week

LAST WEEK

NIFTY opened the week flat at 17,820 on Monday. The index slowly moved down to 17,650 by Tuesday noon. The level offered a strong support and NIFTY bounced to give a rally that stopped at 17,900 on Wednesday. The resistance continued to limit the prices on Thursday as well. Friday saw a range-bound day and NIFTY ended the week flat at 17,857.

BANK NIFTY opened flat at 41,461 on Monday and consolidated by taking support at 41,300. The index moved down on Tuesday but there was a bounce from 41,100. 41,600-800 acted as a strong resistance zone and BNF ended the week at 41,559, up by 60 points or 0.14%.

IT moved up by 0.89%.

Foreign Institutional Investors net-sold shares worth Rs 3,000 crores last week.

Domestic Institutional Investors net-bought shares worth Rs 2,000 crores.

Global Markets
The US markets closed in the red with S&P500 closing 1% lower. Dow managed to close with minor losses only. The IT stocks were the major losers but they had moved up well in the previous weeks. The European markets also closed lower. DAX is 1% down WoW. The Asian markets had a red week except for NIKKEI which closed 0.6% higher. 

NIFTY’s weekly candle is a doji. The range was strictly controlled. Volatility subsided and the VIX is now below 13. The price movement is within the range of the 23rd Jan weekly candle.

RBI hiked the interest rate by 25 basis points. The event did not make the day rather volatile, unlike the previous time. Though inflation has eased, it is still higher than the target and thus the body did not say that it is an end to the hike for the year. Still, the chances for another hike this year are less.

Germany's CPI came out slightly better than expected. Hope you remember the statement by the experts saying we cannot expect a continuation of the decline in the inflation rate when it dropped last month. Let us see if the trend continues.

The price action of DAX looked good and it seems that the German market can hit an all-time high before Nifty. Both indices are nearly 5% away from the high. However, the last two day candles do not look good and it has also led to a red close for the weekly candle.

SGX Nifty is at 17,883.

INDIA VIX dropped to 12.7.

WEEK AHEAD

NIFTY has supports at 17,800, 17,720 and 17,650. We can expect resistances at 17,915, 17,970 and 18,000.

BANK NIFTY has supports at 41,500, 41,250 and 41,100. Resistances are at 41,600, 41,800 and 42,000.

FIN NIFTY has supports at 18,480, 18,400 and 18,250. Resistances are at 18,550, 18,660 and 18,900.

NIFTY has the highest call OI build-up at 18,000. The highest put OI build-up is at 17,800.

BANK NIFTY has the highest call OI build-up at 41,500. The highest put OI build-up also is at 41,500.

FINNIFTY has the highest call OI build-up at 18,700. The highest put OI build-up is at 18,400.

Major events of the week are as follows:

MONDAY

India CPI 

TUESDAY

India WPI

US CPI

WEDNESDAY

UK CPI

THURSDAY

US PPI

FRIDAY
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Oil prices have rebounded after falling by 8% last week. Keep an eye on the prices.

There was heavy selling by FIIs in January and if you look at February data, you can notice that there is a slowdown in the pace. 

Adani Enterprises will announce its results this week.

The most important event is the release of US inflation data. December inflation was at 6.5% and the January data is expected at 6.2%.

I will watch 17,800 on the downside in NIFTY. 17,915 can be watched on the upside.

Let us know your expectations for the week in the comments section!