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.