Nifty Prediction for the Week Starting From 27 March 2023

In our last week’s study, we had planned to sell Nifty 50 when it would retest the zone of 17350-17450. Though a retest happened and bearish move also came but retest level was 17207, therefore, we missed the trade this week too.

Below is the study of the technical charts of the index which would give us an idea of where Nifty is heading towards.

NIFTY 50 Technical Analysis

The weekly chart is exhibiting that the Bearish Cross (09 EMA below 21 EMA) is intact and price is also trading below the 50 week’s exponential moving average. On the other hand, the daily chart of the index is also showing the retest of the Bearish Cross (09 EMA below 21 EMA) formation. 

On these two major timeframes, the Nifty technical chart is demonstrating bearishness which is also exhibited on the hourly chart through the Bearish Cross (09 EMA below 21 EMA) formation, albeit the RSI is at 16 which might aid in an upward movement. However, the overall Nifty technical analysis is suggesting us to take a bearish trade only, which should be taken at the levels of 17000 or so, for the targets of 16737 and 16054.

NIFTY 50 Options’ Open Interest and FII-DII Data

Along with the technical charts, the institutional buying and selling figures also play very important role in the market movement. Upon checking the FII DII data, we find that the Foreign institutional investors have sold equities worth ₹6654.23 crores while the Domestic institutions have bought worth ₹9430.59 crores, which means there has been a net institutional buying of ₹2776.36 crores, which is signaling towards bullishness. However, we have been witnessing for quite a long time that the bullishness doesn’t come unless FIIs start buying. Therefore, the institutional figures will either keep the market sideways or force it to fall.

Open a Trading Account with us

Talking about options’ data, the OI charts are evincing bearishness through the addition of highest open interest at the CALLs of 17100 and 17000 on Friday, 24 March 2023. Along with this, there has also been good PUT unwinding at 17100 strike which is an aid in the market weakness. Furthermore, the outstanding open interest chart is also showing CALL-led strong resistance at 17100.

Options' Open Interest Data Bar-Chart

Conclusion

On the basis of our above-mentioned Nifty analysis, we are in favour of taking a bearish trade at the current levels of 16945-17000 with a stoploss at 17211. If index goes up from here, we can add a few more lots near 17150-17175 but the stop loss should be strictly placed at 17211. The targets on the downside would be 16737, 16501, and 16054.