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.