More correction coming or is it over ? Market Analysis : March 22 2021

•  Nifty bounced back from a previous window gap support near 14336-14467 levels after a continuous fall for 5 days bleeding near 1000 points

• Apart from the window gap support not yet broken there is momentum support. FIB retracement on last swing is still giving 50% level support in confluence with gap.there is also a trend line support from March 2020 low. In addition the Friday candle pattern is bullish piercing

• Volatility continue to be contracting showing markets are still consolidation mode and is not trending yet

• US yield shot up and market did a heavy fall on last expiry day. FII continue to be in buy mode most of the days when markets were falling last week.

• Daily momentum is at good RSI support level indicating a potential up move again. Weekly and monthly momentums are still intact in bullish zones.

• Weekly positive reverse divergence seen on momentum indicating an up move with possible targets of 15000 if it works out

• Trend daily signal ADX did a cross over on the positive directional movement with good strength. While weekly ADX trend is heading south on weekly and monthly

• The crucial 50 dma was broken last week with the bearish moves in market

• M candlestick pattern  is a threat if breaking support the neckline

• Open interest  for futures has short covering buildup on both indexes. Open interest for options for March monthly expiry shows highest support at 14500 and has bullish indications overall while highest call writing seen at 160000 and 15500 levels

• Put call ratio of 0.98 is also not in bearish levels

• Net advances on last trading day was green

• Bank nifty had more than 3000 point lost just in a week but bounced back on Friday again from the previous window support levels 33305 level and currently has momentum at  support levels. FIB retracement levels of 50% hold good support as well. volatility contraction and consolidation is seen and any breakage of FIB levels at close could mean a very deep cut that could extend to previous swing lows of 297000

• Open interest on bank nifty showing bearishness unlike nifty with most call writing seen at 36000 levels while support levels are at 33000 levels

• Despite the bearish moves last week India VIX did not shot up but actually fall down from 28 levels on 3rd march  to 19.8 level in between which could be taken as fear/greed levels in markets cooled off and so market may be less volatile as compared to earlier weeks.

• If market could conquer the 50 DMA and resistances at 15000 then it may move till previous all time high and if it fails to do so in coming few days the consolidation could continue or any moves below 14350 previous low could mean a dip 14000 for sure.

• Market may still be consolidating for much more time although it may attempt to rise up coming week as indicated from the various technical supports mentioned in beginning but within  the Bollinger standard deviation range only and any failure of same will see 14000 levels tested is my view.. Slightly bearish view overall.