By Anand James
A week of wild swings ended on a positive note but left enough doubts to start Monday on an even poise. Friday’s ascent in Nifty evolved at a much steeper angle when compared with the ascent to the peak of 30th as well as the dramatic ascent thereof. This hints at strength, and we are encouraged to lift our upside target to 19,790. The reason why it may not be a unilateral rise is the proximity of the congestion resistance at 19,480. However, as long as dips are restricted to 19,367, positivity may be expected to prevail. Alternatively, the inability to do so could add momentum to a breakdown that could potentially aim 18,800 – 18,300 with intermediate support seen at 19,175. That said, the conditions of a major collapse have reduced in the last few days. One of the supporting aspects is the decline in VIX in the last three days, to levels last seen when Nifty was near 19,600.
Meanwhile, lacklustre moves dominated USDINR last week, after falling sharply from the record peaks. But buying efforts resurfaced quickly on testing the 82.5 region, suggesting that USDINR is not in a hurry to head to the sub-82 levels that we have seen almost every month since October 2022. Towards this end, we will go in next week, continuing to eye the 82.8-82.5 band. While this is not a breakout band, breaks of either extremity could hint at the potential for sizable moves worthy of trades, with the next range seen as 82.2-82.93.
(Anand James, Chief Market Strategist at Geojit Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing.)
