The Indian benchmark indices managed to hold higher and rise last week. Sensex and Nifty 50 rose above the psychological 61,000 and 18,000 mark respectively last week. However, they failed to sustain higher and had come-off towards the end of the week. The indices have closed the week marginally higher by about 0.5 per cent each. Although a further dip in the near term cannot be ruled out, the overall picture remains positive for both the Sensex and Nifty. As such, we continue to retain the bullish view and reiterate to buy on dips from a long-term perspective.
Nifty Prediction for the week Feb 20 to 24, 2023 | BL GURU
Among the sectors, metals and capital goods outperformed last week. The BSE Metals and BSE Capital Good indices were up 1.92 and 1.64 per cent respectively. The BSE Power (down 3 per cent) and BSE Realty (down 2.81 per cent) index were down the most.
FPIs buy
The Foreign Portfolio Investors (FPIs) seem to have reversed their positions. After selling the Indian equities for seven consecutive weeks, the FPIs have turned net buyers. The FPIs bought $927 million in the equity segment last week. If the FPIs increase the pace of buying, then that would be positive for the upmove in the Nifty and Sensex to gain momentum. We will have to wait and watch.
Nifty 50 (17,944.20)
As expected, Nifty rose breaking above 18,000 last week. However, it failed to sustain the break. The index made a high of 18,134.75 and has come off below 18,000 towards the end of the week. Nifty has closed at 17,944.20, up 0.49 per cent.
The week ahead: The near-term picture is slightly mixed. There are chances to see some more dip from here. But strong supports are there for the Nifty that can limit the downside. Immediate support is at 17,900. Below that the 21-Day Moving Average (MA) support is at 17,860. Thereafter, a cluster of supports are poised in the broad 17,800-17,700 region. So, we expect the downside to be limited to either 17,900/17,860 itself or 17,800-17.700 in case the current fall gains momentum.
Resistance is in the 18,100-18,200 region. If the Nifty manages to sustain above 17,860, a rise to 18,100-18,200 can be seen this week. Such an upmove will also keep the chances high for the Nifty to break above 18,200. Such a break can take the Nifty up to 18,800-19,000 in the short term.
The short-term outlook will turn negative only if Nifty breaks below 17,700. In that case, a fall to 17,500 can be seen. But such a fall looks less probable.
Medium-term outlook: The bigger trend remains up. The broad 17,500-17,300 region will be a strong support. As long as the Nifty stays above this support, the medium- and long-term outlook will remain bullish. As such, we retain our view of the Nifty targeting 20,000-20,500 in the coming months.
This bullish outlook will go wrong only if the Nifty declines below 17,300. In that case, a steeper fall to 17,000 and 16,650 can be seen. But on the charts, the fall below 17,300 looks unlikely in the absence of any new trigger.
Sensex (61,002.57)
Sensex broke above 61,000 and rose well beyond 61,400 in the first half of last week. However, it failed to sustain higher and has come off from the high of 61,682.25. Sensex has closed the week at 61,002.57, up 0.53 per cent.
The week ahead: Immediate support is at 60,900. The next strong support is around 60,500 where both the 21- and the 100-Day Moving Average (MA) are poised. Resistance is at 61,250
We can expect the Sensex to sustain above 60,500 and rise back towards 61,250 in the near term. A sustained rise past 61,250 will be bullish to see 62,000 and higher levels in the short term.
Sensex will come under pressure for more fall only if it breaks below 60,500. In that case, a test of 60,000 and even lower levels is possible in the short term.
Medium-term outlook: The broader trend is up. 58,500-58,000 is a strong support from a medium-term perspective. As long as the Sensex stays above this support zone, the outlook will remain bullish. We retain our bullish view of the Sensex targeting 64,000 initially and then 65,000-66,000 eventually in the coming months.
Nifty Bank (41,131.75)
The Nifty Bank index had failed for the third consecutive week to breach 42,000. The index made a high of 41,979.10, but fell back sharply from there. The Nifty Bank index has closed the week at 41,131.75, down 1.03 per cent.
On the daily chart, the sharp reversal from the high last week looks bearish. This leaves the index vulnerable to fall more from here. A crucial support is at 41,000. A decisive break below it can drag the Nifty Bank index down to 40,000 and even 39,000 in the short term.
The region between 42,000 and 42,200 is the strong resistance. Nifty Bank index has to breach 42,200 decisively to ease the downside pressure. Only in that case, the outlook will turn bullish. It will then bring back the chances of seeing 43,000-44,000 on the upside.
Dow Jones (33,826.69)
The Dow Jones Industrial Average has been stuck in a narrow range of 33,500-34,350 over the last three weeks. The range could slightly widen to 33,500-34,500 in the near term. Our bias continues to remain positive. As such, we expect the Dow Jones to break the range above 34,500 eventually going forward. Such a break can take the index up to 35,500 in the coming weeks.
But if the Dow breaks the current range below 33,500, it can fall to 33,000-32,800. In that case, the rise to 35,500 mentioned above will get delayed.