Nifty Prediction for the Week Starting From 13 March 2023

We had advised in our last week’s analysis that ‘Nifty 50’ should be bought above 17645 for a target on 17800, and it went up to make a high of 17799.95 which means that the target was almost achieved. We had also advised to take a bearish trade below 17427 which also worked well by means of falling till the level of 17324.35 on Friday, 10 March 2023

Let’s check out the technical charts to determine where Nifty is heading towards.  

NIFTY 50 Technical Analysis

The weekly chart of the index shows the formation of bearish cross (09 WEMA below 21 WEMA) along with the formation of a good red candle. This candle also closed below the 50 week’s exponential moving average. All these formations are indicating towards bearishness.

Nifty Weekly Chart showing the placement of the important moving averages

Looking at the daily Nifty technical chart, it is evident that the index has slipped from the 50 days’ exponential moving average, and it closed below 200 days’ EMA as well as 200 days’ simple moving average. Though the charts are forming perfect bearish setups but the price is quite far from both constituents of the bearish cross (09 DEMA below 21 DEMA), and therefore I presume that the index may go up a bit, may be up to 17600 or so, before falling further.

Nifty 50 Daily Chart displaying the placement of important moving averages

Let’s check the hourly chart too, the bearish cross (09 EMA below 21 EMA) has been formed on Friday, 10 March 2023. The hourly chart also shows that index traded sideways on Friday, and it seems that price is waiting to retest the bearish cross setup. However, the hourly chart set up is also bearish.

Nifty 50 Hourly Chart exhibiting the placement of 09EMA, 21EMA, and 50EMA

So, the above mentioned Nifty technical analysis suggests that the nifty is likely to fall further to make a low of 16800 after testing the level of 17550-17650.

NIFTY 50 Options’ Open Interest and FII-DII Data

The institutional data is showing that foreign institutional investors have bought equities of worth ₹1769.68 crores and domestic institutional investors have bought worth ₹1211.97. It means the institutions have bought worth ₹2981.65 last week, which is a bullish indication.

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Alright, let’s check the options’ data, the options’ open interest addition chart shows that there has been highest open interest addition at the call of 17500. On the outstanding data chart, it is evident that the strike of 17500 holds highest CALL-OI while the 17400-strike holds slightly lower PUT-OI but it also holds similar CALL-OI there. So, the Open-Interest data suggest the bearishness.

Options' Open Interest Data Chart

Conclusion

On the basis of our above-mentioned Nifty analysis, we suggests to take a bearish trade if index retests 17550-17650 zone. We can sell the index if a red daily candle is formed at these levels, with a stop loss above the candle’s high, for the first target of 17255 and a second target of 16815.