Nifty Weekly Analysis for the week ending 01 March 2018

Sensex opened the week at 34226, made a high of 34611, low of 34016 and closed the week at 34047. Thus it closed the week with a loss of 95 points (-0.28%). At the same time the Nifty opened the week at 10527, made a high of 10632, low of 10447 and closed the week at 10458. Thus the Nifty closed the week with a loss of 33 points (-0.31%).

Let us discuss few observations on last week/month Indian benchmark movements. 

1. On the daily charts, both Sensex and Nifty have formed a small black body candle with upper shadow and made lower high, lower low pattern on daily chart.
2. On the weekly charts, both the indices have formed small black body candle with an upper shadow. The upper shadow is indicative of selling pressure at higher levels.
3. On the monthly charts, Nifty has formed a Bearish Engulfing pattern.
4. In February, Sensex posts worst loss in two years. 
5. Bearishness is visible  across daily, weekly as well as monthly timeframes.
6. Nifty in a formation of bearish pennant pattern.  On breakdown below 10300 on closing basis, it will result in the resumption of the down move. Hence, as long as the market consolidates without such a breakdown, chances of a breakout will remain higher with a target of 10,800 levels.
7. The midcap and smallcap indexes underperformed the benchmark index.
8. Last week we have discussed “For Nifty strong resistance comes near 10613 level which is the high of engulfing bearish candle made on 16 Feb 2018.  Also 50d SMA also placed around 10610.  Next strong resistance for Nifty comes around 10830 level which is 61.8% retracement from the recent decline – 11171 to 10276.”.  Nifty struggled in 10600 area and made a high of 10632 but unable to close  above 50 SMA level.. 
9. In February, Volatility has moved up sharply and tested highest levels (24.04) since demonetisation. Vix closed at 14.07 in this week
10. Options data for March series indicate highest Call Open Interest is now at the strike of 10800 whereas the highest Put build-up is at the strike of 10400. Thus Options data suggests a trading range with resistance at 10800 & support at 10400.
11. Global financial markets: Global stock markets ended the week on a negative note. 
12. FIIS are net sellers this week.