Nifty, which closed at the 25,320 level last Friday, ended this week at 25,694, recording a gain of 374 points. However, the index witnessed significant volatility of 1,662 points during the week—dropping to a low of 24,679 following the budget presentation and subsequently rallying to a high of 26,341 on the back of the US-India trade deal news. A noteworthy point, however, is that neither the sharp fall post-budget nor the sharp rise following the trade deal saw any significant follow-up selling or buying. While such massive volatility is technically considered a slightly ominous signal, a definitive conclusion can only be reached after taking into account the follow-up moves in the coming days.
On a weekly closing basis, Nifty closed just above the critical level of 25,693. However, the last trade of the day actually took place at 25,674. (This discrepancy occurs because the NSE declares its official closing rates by calculating the volume-weighted average price of the last 30 minutes of trading, causing the actual last trade and the official closing price to differ.) Given this, one might have to assume that Nifty actually closed after losing its key support! Therefore, how Nifty moves in the coming days and by the end of this week is crucial.
In the coming days, the two critical resistance levels to watch on the upside are 25,791 and 25,884. If the index can sustain a close above these levels, it is definitely a sign that the market is moving in favor of the bulls. Subsequently, the resistance zones of 26,210–26,373 and the targets of 26,987–28,110 will become important for Nifty.
Now, let’s look at the key levels on the downside. Once past the “no-man’s land” of 25,678–25,693, the first support to watch is at 25,557. If it closes below this level, it indicates that further selling pressure awaits the market. Nifty could then move towards the 25,100–24,700–24,530 levels.
The movement of the Rupee will provide very important cues in the coming days. After hitting our previously observed target of 92.85, the Rupee currently stands at 90.73. Here, 89.75 is a very critical support level. Watch closely in the coming days to see if this level is breached.
The Dollar Index, after reaching very close to the previously mentioned support of 95.33, is now at 97.55. The resistance at 99.36 and support at 96.97 are the levels to watch in the coming days.
Gold (Comex) is currently at the 4,979 level. For Gold, which reached near the support of 4,422, the first resistance level to watch on a closing basis in the coming days is 5,095. If this can be breached, Gold can sustain its upward potential.
Silver (Comex) crashed from its all-time high of 121.75 to as low as 63.90 last week. It is currently standing at 76.89. Holding the 75.36 support on a closing basis is crucial for Silver bulls; if this is lost, the next level to watch is 60.87. If 75.36 holds, a move toward the 95.70 level is possible.
Crude is trading at 5,824. The support at 55.29 and the resistance at 61.87 are important for Crude.