Weekly Outlook of Nifty from April 1st - April 5th

Last week it was mentioned that “The technical indicators are bearish but positive divergences are seen. Hence one can see very limited downside and expect a pullback rally from 5600 level.” What happened next – Nifty placed a low for the week at 5604 and then we witnessed a pull-back finally closing at 5682.

On expiry day the Index traded in red during the first half of the day and suddenly spurted higher from 5600 level. However the 19000 level could not be regained, but the index managed to close above the long term moving average keeping the bull market alive.

Weekly technical indicators are looking bearish. The RSI has slipped below its 50% level. The ROC is dropping into negative territory, below its 10 week MA. The MACD is positive, but falling below its signal line. The Slow stochastic has dropped to the edge of its oversold zone.

Some more correction/consolidation can be expected. However, a big correction seems out of the way for now. Any further fall may get support from 18050/18300.

Nifty is once again back above its long-term moving average which will help the bulls to take the Index higher and further bounce will encourage the bears to sell.  Some more correction/consolidation is likely.

Conclusion: Index has received support from its respective long-term moving averages. Some more correction/consolidation is likely. However Index is in highly oversold state and any up move above 5700 can trigger to 5770/5863. Even if both indices fall further, it may not end the bull markets. Stays invested and accumulate fundamentally strong stocks that have been beaten down