Technicals for week ending – 24th January 2016.

Nifty Weekly

The primary longer term trend still remains down for me as the Nifty index is below its 40 week moving average. On the weekly charts, the Nifty broke its support and closed below the blue shaded region for 2 weeks in a row now. Similar pattern was seen on the Bank Nifty which has the highest weightage in the Nifty index. For a longer term bull trend would like to see these indices trading above their 40 week moving average and above the downward sloping trend-line. The Nifty/Bond ratio deteriorated further this week and has been signalling that bonds would be a better performer since 2015.

On a short term time frame the VIX projected 30 sessions range is suggesting that the Nifty index could see a bounce in this week. As per the weekly charts the first resistance comes in around the lower blue shaded area i.e. 7600 levels. A weekly close above that could mean a quick run up to the next resistance zone around 7950.