Bulls are here: Weekend Market Analysis : May 29 2021

• Market rallied more than 2% last week after the breakout on previous Friday and settled few points above the last previous all time high with two consecutive small body candle days indicating tough presence of both bulls and bears. Bank nifty also moved more than 2% but ended in red end of week.

• Nifty corrected around 8% in around 3.5 months from previous swing high before reaching back there last day. Bank nifty corrected nearly 20%  and yet to go back there

• Nifty which has close above all time high has Fibonacci extension projection from previous swing low indicate it an up move happen it could move up to at least 15900 levels.

• A double bottom breakout W pattern is clear visible like last week on both indices  indicating there is a good breakout potential from current levels.

• Nifty has a small gap support between last two candles could work out well if there is minor retracement before moving up further.

• 15050 is the best support downwards from where it had broken out earlier. If by any chance that is broken there is 50/100 moving average to support at 14750 levels.

• Bank nifty has not yet reached all time high which is more than 2500 point away but could face hurdles both at 36400 previous swing high levels and 37700 all time high levels before that.

• Bank nifty has support at 34300 levels from where it broke out earlier and below that it could find support near 33000-33250 levels at the moving averages and trendline channel.

• RSI momentum is on bullish zoned on all timeframes (short/medium/long term)for both indices.

• Daily timeframe(short term) is showing how a momentum range shift into bullish zones worked out well on bank nifty.

• The monthly candles(yet to close) are very bullish green long for nifty and bank nifty.

• However  could come out with a potential bearish momentum divergence on monthly candle depending on close of Monday if momentum is not moving up from current which may indicate correction up to 30400 levels but on a longer term basis  only if it works out. 

• Trend indicator ADX/DMI has turned up and rising on all timeframes for both indices indicating clear bullishness ahead.

• Futures open interest is bullish long build up on both indices.

• Open interest on nifty options shows that 15500 has higher call writing while 15300 could be good support for next expiry.

• Bank nifty open interest data shows 35500 as resistance level while 35000 has highest support level seen although a large writing is still seen there which could mean next week may see more bull bear tug of war before decisively conquering it meanwhile 34500 is immediate support below it.

• Put call ratio is bullish for nifty 1.32 but not bullish for bank nifty at 0.75

• India VIX fall more than 16% last week alone and has reach 17.4 pre-pandemic levels. This is further confirmation that bullishness may be continuing ahead. The covid case rate and sentiments has brought down VIX probably.

• Implied volatility is above historic IV levels and IVP has fallen from 70 to 0.8 low levels indicating only 0.8% of time in past year has been lower  than current IV. Currently IV is sharp falling phase  and premium \of option also may be less.

• IT,Energy,Auto,Infra are other sectors seen in the bullish zones.

• FII where buying good last week except for Thursday. 

• Dollar index has regained the 90 price level and seems reverting while USDINR trades with rupee strengthened to 72.4 levels and look like bottom may have been hit and could hover around there or revert from there. Gold continues the rally up after the trendline breakout.

• Overall market having a nice round patter with potential for a very good breakout after a fair correction and going short is out of question while the nature of  further up move could be a slow trending rather than an upright breakout to hit 16K.Therefore credit/debt directional spreads based long trades on option could give results while directional momentum breakout trades with stop loss intraday could be effective as well.

Finally outside the bearishness : Weekly Market Analysis : May 24 2021

• Market did a dramatic move last week  with 412 point(2.75%) bounce from 100 dma in 2 days and dipping a 252 point(1.65%) next 2 days and then moving up another 305 point (2%) in a single day finally closing at 15175 conquering major resistances and indicating heading toward another all time high in coming weeks. The major driver for the market action was the Bank nifty making a whopping 2374 point(7.3%) up move last week.

• Nifty has good support of 50 and 100 dma near 14650-14735. All time high is close by and could find some resistance before breaking same.
  

• Bank nifty did a cross over of 100 above 50 dma last week which gives a hint that further bullishness could only happen if 50 dma above 100 crossover happens again. Therefore consolidation could be expected.
  

• Bank nifty could find support at the 50/100 dma at 33250-33400 levels. On the upside 36500 could find resistance since it had multiple previous resistances seen there. 

• Breaking all time high is more than 3000 points away and could find some consolidation in coming weeks ahead before breaking it.
  

• Both indices has a big green candle with open =low normally indicating clear bullishness ahead.

• W double bottom pattern breakout can be clearly seen on daily timeframe on both indices and if we project the breakout target they are indicating it is likely to reach all time high level or beyond

• Looks like on monthly timeframe both indices is doing a change in polarity bullish bounce that could further continue  much ahead. 
  

• Momentum breakout in seen in both indices heading to bullish zones on daily timeframe.

• Weekly momentum which had fallen last week into sideways has reentered the bullish zones on both indices.

• Trend indicators are bullish on both daily ,weekly timeframes and ADX trend strength seem to have turned up and could expect rising in coming days.

• Open interest on futures data is showing that it was a short covering rally that happened on Fridays near 2% move on nifty while bank nifty was clearly long buildup. Options open interest on nifty showing 15000 has large put writing while highest put writing is seen at 14000.major resistance seen at 15500.Banknifty open interest on options is showing support at 33000 and resistance at 35000 levels

• Put Call Ratio is bullish on both indices with 1.23 for nifty and 1.10 on banknify

• FII and DII have turned buyers last week in cash market.

• Banks,energy,auto,pharma,media are sectors seen in bullish zones.

• Globally US market has major correction last weekly following the bitcoin crash , and it is expected to recover from it coming week.The USDINR currency pair has broken 73 levels and could find support around the area. Dollar index also seems to be consolidating and taking support although it broke the 90 levels earlier last week.
  

• Gold has broken out of the trendline channel and seems to be heading north. 

• India vix fall nearly 6% last week closing near 19 which again is good since it has been a volatile >20 levels for long time and another indication that bearishness may have halted for time being. Implied volatility is above historic volatility levels. The IVP has fallen and says that only 1.6% of time in past has been lower  than current IV.
  

• To wrap it up last week showed great strength overall and momentum, trend and price action has at least moved away from bearishness and is looking forward to continuation of bullish cycle after a fair correction. However a recovery of this pace has to slow down before it could further move and therefore next week may see good amount of consolidation next week. I would not recommend take  positional directional positions for next week due to same reason but instead neutral setups with readiness to make adjustment if all time highs are broken. Intraday option trading could be  rewarding if price action is followed with tight stop loss.

When is the breakout?: Weekend Market Analysis : May 17 2021

 

• Last week nifty fall around 2.5% while bank nifty fall 3.5% after an attempt to move up, thereby continuing the consolidation since near 3 months now.

• While bank nifty could not even stay above 100 day moving average , nifty did conquer 50 dma but fall back from the 100 dma , at a major resistance near 15000.

• Nifty currently is taking support at 100 dma with near support at 14150 which is the previous swing low and major resistance above remain the 15050 levels as it is still moving in a trendline channel.

• There is a likely chance of both indexes having a 50 and 100 day moving average cross over to happen after one of the longest gap ever from previous crossover historically and this could mean this bearishness or sideways movement that could continue around 4 months based on average data.

• Bank nifty could find support at 30400 previous swing low levels and major resistance to move up would be 34300 which means above both 50/100 day moving averages and a trendline channel breakout.

• Nifty and bank nifty as daily momentum in the sideways zones and weekly momentum also resisting and moved into sideways.

• Monthly RSI momentum of nifty remain in bullish zones while bank nifty has given up the momentum bullishness for long term.

• Trend remain up for both indexes on ADX on long term while medium term trend is weakly in bullish zones and on daily timeframe trend is strong bearish for short term.

• Open interest analysis on nifty futures shows short covering .options data showing highest call writing 15500 but that may be due hedging but 15000 has a high resistance and 14000 is where supports are seen.

• Open interest analysis on nifty futures shows short buildup. Options data showing highest call writing at 32500/33000 while high supports are seen at 31000 levels.

• Pull call ratio showing bullishness of 1.11 for nifty while it is bearish for bank nifty 0.71.

• India VIX fall 2% last week even though market was falling which could probably mean the fear factor is less and markets may not fall big. IV is higher than historic IV slightly while the IVP says only 32% of time in past has been lower than current IV.

• FII sold heavily last 3 days something around 4000 crores which is a concern.

• Pharma,FMCG,Metal,Energy are sectors seen in bullish zone.

• Overall it is clear consolidation of market that is seen and as long as covid numbers don't further escalate, the market may not fall much and would continue the sideways moves. lowering VIX and nifty PCR indicate same but bearishness of bank nifty and FII selling remain concern for next week.

• Dollar index is falling and could break 90 support levels also but same time USDINR does not show any strength in rupees either. Historically market seen to move up when dollar index falls.

• Neutral options strategies based on support and resistance levels could work out during this phase for short term positional play. Intraday movements are very choppy these days and therefore scalping or directional option buying or selling with strict stop loss could be tried.

How much more of consolidation? : Market Weekend Analysis : May 10 2021

• Last week market fall 1.77% on Monday and then shot up 2.77% up in 4 days finally closing above 50dma with a doji candle.

• Bank nifty attempted for up move but failed to conquer the 100 dma yet.

• Daily Momentum remain sideways on rsi while ADX is falling and weakly bullish on both indexes.

• Nifty managed to close weekly momentum in bullish zones while bank nifty continues sideways on it.

• Monthly momentum and trend both continues to be on upside on indexes.

• Daily nifty is also on window gap support at 14745 levels.

• closing above 15045 would be the first hurdle to cross for us to understand bullishness is here to stay .

• Similarly closing above 34300 on bank nifty would be a channel breakout and close above 100/50dma.

• If an up move does not happen in which case as long as nifty holds the 14150 levels it could mean a continuation of the sideway move and any fall from there has support at 13600 only.

• Bank nifty if it fails to move up then it could dip to 30400 previous swing level.

• Futures build up shows clear long buildup on both indices .

• Options open interest on nifty has large call writing at 15200 and 15000 levels while supports are seen at 14500 which is bullish if we read it along with a a PCR of 1.3/

• Options open interest on bank nifty has large call writing at 34000 levels while supports are seen at 32500 which is clear not bullish if we read it along with a a PCR of 0.9.

• VIX fall down more than 12 % last week which probably indicates the market does not have the fear factor as much as previous week. The IV is above the historic IV levels.

• FII bought only last Thursday and rest 4 days where sellers indicating that big up moves may not happen at least and also potential sell off in case of any trigger.

• Overall there is some kind of bullishness seen in market but bank nifty does not seem to be in line with it.

• Market may not make big moves and continue to consolidate for more time until there is more clarity on uncertainties around and less likely to fall for same reason. Non directional strategies based on support and resistance levels mentioned above could work out. Intraday price action based index trades on strict stop loss also should work out. Positional long or short swing trades need confirmation of a breakout and not recommended  to assume anything.

Consolidation to continue ? : Nifty weekend analysis : May 3 2021

• More than 5% index up move previous week and then in two days gave up 3 % of that after hitting a 15K resistance giving up the 50 dma also that was conquered earlier.

• The price momentum has taken a resistance and turned downward before climbing into the bullish zones. However it still has the support of 20 and 100 dma and still within the trendline channel support.

• Bollinger band shows a consolidation clearly. 14450,14150 and 13600 are seen as supports if it falls off the channel and below the 20 dma support it has taken at 14600.

• 15000 would be hurdle to close if nifty stop the fall and reverse.

• Although the trend has again crossed over to bearish zones both in daily but with ADX falling down showing the bearishness could be short-lived. weekly trend is bullish but ADX is not rising.

• Monthly RSI momentum as well as ADX trend continue to be bullish although weekly momentum is still at resistance.

• Open interest on futures shows short buildup while options data shows highest call writing is at 15000 levels while the support levels seen at 14000 for the next expiry.

• PCR is not bullish yet on nifty at 1.06.

• Bank nifty also made up move as nifty on charts last week but hit the resistance at 50 dma and lost the earlier conquered.

• 100 dma also in the previous 2 days of down move. Support levels are seen at 30400 and 29000 levels if it continue\the down move on Monday. 

• Banknifty also lost the rsi momentum at hit resistance at 34000 levels. Bank nifty trend can be said as having a  weak bearishness on ADX.

• Bank nifty has Weekly trend is bullish but ADX is not rising. But Monthly RSI momentum as well as ADX trend continue to be bullish although weekly momentum is still at resistance.

• Climbing the 50 and 100 dma and closing above it could bring back bullishness in bank nifty.

• Current bearish trend does not have strength if u look at ADX of bank nifty.

• Open interest if bank nifty future is showing long unwinding meaning both price and open interest are falling and is bearish. Options data shows resistance at 34000 levels and support at 32000.

• PCR is not bullish yet on bank nifty at 0.82

• India Vix actually fall overall last week it by  4% and then moved up finally settled at 23 levels.

• Nifty IV is slightly above historic IV and and IVP also has fallen 10 points at 68

• FII sold nearly 3500 crore selling on Friday is a big concern.

• US market remain bullish but local cues are bearish due to covid uncertainty

• Pharma was only sector seen bullish on last trading day.

• Overall the markets are very volatile and doing a consolidation but same time not yet ready to have a crash due to the uncertainty. As long as local cues improve or no major worse news comes in a crash may not happen though there is probability of testing the previous swing lows and then continue the consolidation for weeks ahead until positive news flows in. Intraday trades can be made on support resistance levels without much issue but going bearish or bullish positional or swing trades should be only after the direction  confirmation is clear enough.