Nifty Next week

2 weeks back when we did a study on the Nifty for the medium term trend, we had emphasized the importance of the 5550 levels on a closing basis for the weekly trend to move up . On the daily we had capped the volatility to stay below 5623 levels based on the profile charts we have been observing.

As we begin the next week, the indices are at levels where they were about two weeks back. With world markets turning volatile, monetary policy announcements and the intermediate term time-cycle and the daily cycle approaching their ends, we may get a decisive move away from the range sometime during the middle-to end of this week.

Let's look at the charts to see where the move can emerge.

In the past ten sessions, the profile has clearly gone sideways, with value being created between 5490 and 5570.Friday's close was at the developing point of control at 5488 and the lower boundary of the value area mentioned above. What stands out in the profile is the single prints from 5436 to 5416 which the institutions would try to defend in the early part of this week. A failure here can easily set the index to 5350 levels.

Let's also look at volume profile charts to see where the volumes have occurred over the past thirty days.

There are two composite profiles in the chart- one for a five day period and the other for the 30 day period.Both of them show high volumes at 5535/ 5550 which if overcome on the upside may result in some short covering in the markets.

On the whole, the week promises to be volatile as the market should be testing some known reference points again.

Trade safe.