Nifty weekly chart analysis
Nifty spot this week closed with loss. This was first losing week for nifty after last 4 weeks straight gains. This week nifty spot hit high at 8180 while low was at 8057. Total 125 points weekly swing or almost 2% plus volatility and closed with loss on strong profit booking.
On weekly chart, nifty spot has support around 7840 and below it 7500. While on upside 8195 and then 8550 are strong resistances. On indicators, made is bullish but forming correction pattern. While rsi is around 75 and look overbought while cci is off the high and formed strong corrective pattern.
From medium term view, nifty has major supply zone around 8190-8200 and if remain under it then expect correction rally up to 7820-7840 zone. This can be expected in next 1 to 3 months period. Nevertheless, any weekly closing above 8195 means continuation of primary trend, which is up. In that scenario, nifty target will be reversed to 8550 with medium term view.
As current level, risk reward is best. Traders here can go short on next month future with stop loss 8200 on spot nifty and for target 7840-7820 on spot nifty. Small traders can buy far month in the money put options with stop loss 8200 on spot nifty.