GOLD CUP AND HANDLE POSSIBLE BREAKOUT : INVESTMENT WATCHLIST

 

1. GOLD seems to be forming a cup and hand pattern on monthly charts. 
2. Currently resisting at the trendline channel on weekly and a short to medium term breakout can be expected.
3. Keep the charts on your watch out and a right entry could easily be found and on confirmation entry can be made for investment.
4. Wide range of investment and trading options exit for gold like Gold ETF(exchange traded funds),mutual funds, commodity futures, gold bonds like Sovereign Gold funds, gold coins etc.
5. GoldBees for example is liquid enough for short term trading also while long terms benefits from highly safe options like RBI issues bonds are highly. suitable for the long term investment.
6. Gold is a hedge to inflation and therefore is essential part of every investors portfolio in the long term and ideally allocation recommended by experts are half % of once age.

Recovered Market to hit 16000 ? : Weekly Market Analysis : June 28 2021

 

• Missed another all time high 6 points short of a continuous previous 7  higher high weekly candles.

• Weekly bullish candle after a spinning top

• Nifty -moved ~400 point recovery this week after a 450 point correction previous week 

• Halting at a major resistance zone 5 days tested.

• Latest nifty daily candle hammer-could be slightly bullish 

• Bank nifty has a wide range bullish  candle pattern 

• Bank nifty moved ~ 1500 point recovery this week after a 1900 point correction earlier two weeks.

• Bank nifty wide range bullish Daily candle with open = low pattern indicate clear bullishness

• Nifty at major resistance confluence of previous resistances tested 5 times and near an all  time high 15901 and rounding number psychological level of 16000 close by.

• It has 20 dma  immediate support 15700 and then 15600 and then 15500 levels below acting good previous swing low supports.

• Bank nifty has 3 previous resistances to clear 37700/36500/35800 and good support near 34000 levels

• Bollinger bands on Bank nifty shows clear volatility contraction /consolidation range bound moves could be expected before breaking out.

• Nifty RSI momentum is still daily/weekly/monthly within bullish zones

•  Nifty daily now has two  bullish positive reverse divergences that could still potentially take it back to all time high on confirmation if it goes above Friday candle high.

• Bank Nifty momentum daily continues to be in sideways zone and resisting near 60.Weekly and monthly momentum  maintains to be in bullish zones.

• Nifty ADX trend indicator continue in  bearish areas on daily timeframe but falling strength while weekly and monthly trend remain bullish with strength 

• Bank nifty has ADX trend indicator last week crossed over to bullish zones  on daily timeframe. The trend continue to be in bullish side on medium & long term timeframes with flat strength.

• Open interest data for Nifty and Bank nifty showing a short covering based on the futures contracts which is bullish.

• Highest options call writing for 01 July expiry is seen at 16000 with 15900 also seen having more writing while 15000  levels shows highest  support point for nifty with 15800/15700 support is close by.

• Bank-nifty options open interest data shows highest call writing at 36000 levels while highest put writing seen at 35000  levels that could act as support for the expiry

• Put call ratio for nifty accordingly is seen 0.98  which is mildly bullish while 1.1 for bank-nifty is bullish.

• India VIX  fall nearly 20% last week and settled at 13.37 

• The IV is above HIV 7.3 and  IVP remaining 0.4  levels which is at the new volatility regime.

• IT sector is bullish with strength in momentum and trend on short/medium/long term charts. All time high Doji

• FMCG is bullish corrected and now bullish momentum divergence seen and could regain momentum to move further up.

• Metal is sideways on short term and need wait till momentum pickup.

• Auto sector weekly momentum range shift and could move up in short 

• Pharma in short term continues  sideways but medium and long term momentum is intact.

• Last week FII bought 3000 cr in cash but where selling nearly 6000 cr almost except 1 day.Thanks to DII who bought all day 7800 cr that caused the recovery.

• The net longs on derivatives of FII/DII had moved up slightly

• US markets recovered last week with green from the Fed event minor impact.

• Dollar Index dipped and consolidated last week at a good support zone of 91.5 

•  USD-INR currency pair at a  resistance zone and gravestone doji indicate a reversal 

• Gold showing a bullish harami weekly candle consolidating last week at a good support zone but lacking momentum and Probably good time to invest in for medium term.

• If your view is moderate bullish  going for a bull call spread on nifty with strike selected at support resistance zones we discussed for this expiry could work if could breakout the all time high at least until 16000.

• A 35000 bank nifty strangle with hedges at break even points can give near 1:2 risk reward with the view that bank nifty could move <1000 points since consolidating and may find resistance to close below 36000 for the expiry.

• Markets corrected well last week after a moderate correction and bank nifty turned bullish.

• Nifty will hit 16000 sooner but may be consolidating before that.

• The daily charts continue to show that it is at momentum support and a potential bullish divergence move up.

• Bank nifty trend crossover and candles seems to be joining the rally could make up move easier.

• Positional long trades would hold good until a clear signal of  breaking  of major support zones indicated earlier, there is no point in exiting or shorting as of now.

• volatility falling heavy to lower levels further indicate upside bias and intraday buying using spreads are safer  given the fact that choppiness and V shape recovery intraday moves are common last many days.

BULL. PUT SPREAD ON NIFTY : EXPIRY TRADE

 

NIFTY JUNE 2021 MONTHLY EXPIRY 15700PE BUY AND 15900PE SELL

Bull put spread is used when u have mild bearish view on the stock or index. It is expected that 15800 since having good resistance in open interest and also on charts it is unlikely to cross it but same time and attempt may be made following reliance agm meeting at 2pm. Book profit at 50% of max profit and exit at 50% of max profit as stop loss. Probability of being profitable  is 50% and risk reward is fine for the intraday.Trade at your own risk and discretion.

Was it just a shake out ?Weekly Market Analysis :June 21 2021

 

• A bearish candle after 5 continuous bullish weeks ,still made another higher high and all time high.

• Weekly spinning top candle is bearish

• Latest Daily candle hammer-could be slightly bullish on confirmation since during a small downtrend. 

• Nifty -moved up 2 days and did 3 days of 450 point correction with a harsh one on Friday to dip it to 15450 support levels last week before recovering back some of the momentum and settling to close to 15683.

• Bank nifty 15o0 point correction before it recovered 650 of it to still closing below previous close 

• Bank nifty has a spinning top bearish candle pattern

• Bank nifty also has 2 days of up-move and 3 days down.

• Last week Nifty broke the support at 15600 levels from where is bounced up and where it also had  at 20 day moving average and  previous resistance too but closed above it.

• Nifty Fibonacci 23 retracement level of 15500-15300 levels is in confluences with the previous resistance that has turned to be support now.15000 would be next level below it which had previous resistance

• Nifty 15800 levels has previous resistances and 16000 would be psychological round number and Fibonacci extension 50 support area.

• Bank Nifty fall off from the 20 moving average support and currently at 34600 level closing above FIB 23.it has 33300/33600 support levels which is in confluence with Fibonacci 38 and previous resistance. Any breaking of FIB 61 levels of 32000 could mean a major downtrend.

• Bank-nifty first resistance at 35600/35800 levels of previous resistance from where it dipped last time and above that resistance at previous swing high of 36500 and then all time levels of 37700 levels would be resistance points.

• Last week Nifty broke the support at 15600 levels from where is bounced up and where it also had  at 20 day moving average and  previous resistance too but closed above it.

• Nifty Fibonacci 23 retracement level of 15500-15300 levels is in confluences with the previous resistance that has turned to be support now.15000 would be next level below it which had previous resistance

• Nifty 15800 levels has previous resistances and 16000 would be psychological round number and Fibonacci extension 50 support area.

• Bank Nifty fall off from the 20 moving average support and currently at 34600 level closing above FIB 23.it has 33300/33600 support levels which is in confluence with Fibonacci 38 and previous resistance. Any breaking of Fib 61 levels of 32000 could mean a major downtrend.

• Bank-nifty first resistance at 35600/35800 levels of previous resistance from where it dipped last time and above that resistance at previous swing high of 36500 and then all time levels of 37700 levels would be resistance points.

• Nifty momentum still daily/weekly/monthly within bullish zones

• Nifty Momentum daily had a bearish divergence on daily chart where price is rising and momentum slowing down that pulled it down to the 15450 levels but managed to recover the momentum and take support in bull zones again.

• Nifty daily now has a bullish positive reverse divergence that could still potentially take it back to all time high on confirmation if it goes above Friday candle high.

• Nifty ADX trend indicator cross to bearish areas on daily timeframe and is rising with reasonable strength while weekly and monthly trend remain bullish.

• Bank Nifty momentum daily continues to be in sideways zone and falling. Weekly is struggling to hold the bullish area while monthly momentum is still taking support at 60 in the bullish zone.

• Bank nifty has ADX trend indicator is in bearish side and rising with strength turning upwards on daily time frame. The trend continue to be in bullish side on medium & long term timeframes with flat strength.

• Open interest data for Nifty showing a short covering while bank-nifty is showing a short buildup based on the futures contracts

• Highest options call writing for 17 june expiry is seen at 16000 with 15800 also seen having more writing while 15000 levels shows major support point for nifty with 15500 support also ahead of it.

• Bank-nifty options open interest data shows highest call writing at 35000 levels while highest put writing seen at 34000  levels that could act as support for the monthly expiry

• Put call ratio for nifty accordingly is seen 1.01 which is mildly bullish while 0.71 for bank-nifty is not bullish.

• India VIX remain flat at very low levels of 14.8.Implied volatility is above HIV with IVP remaining 2.4 levels which is at the new volatility regime.

• IT sector is bullish with strength in momentum and trend on short/medium/long term charts. The FMCG sector was performing despite market bearishness last week.

• We discussed Metal as showing bearish momentum divergence on weekly and it  did correct well. It could take momentum 40 support and consolidate for some period.

• Auto sector bullish momentum divergence failed on daily and it dipped into sideways last week and could be back to bullishness after few weeks if the momentum does not fall into sideways on weekly.

• Pharma and Infra on short term turned sideways but medium and long term momentum is intact.

• Last week on Friday when market corrected and did the v shape recovery In the cash market. Earlier in the week itself they had sold near 2500 crore over 3-4 days. DII also turned into buying moderately after couple of days of selling last week.

• FII were buying 3100 crores is positive with June net buying from FII is 5800 crores while DII where net selling 2300 crore same month till now. They are net longs on derivatives of FII/DII have dipped bit this month so far.

• US markets had the major Fed meeting last week and outcomes jittered all markets including our to certain extend and then recovered soon enough. Both Dow and S&P showing bearish weekly candles.

• Dollar Index gained strength and showed bullish momentum o move from 90 to 92 levels last week and continue heading up resistances seen at 92.5 and 93.5 levels.
• We discussed and suggested that going long on  USD-INR currency pair was not a bad idea in last weekly analysis and it did exactly same and gained near 1.5% last week closing near 74.3 levels at a previous resistance. 

• Gold crashed more nearly 6.5% last week after it was seen consolidating earlier and currently seen back into the weekly channel from where it had done a false breakout earlier. currently at a support zone of previous resistance and close by another support zone 100 point down and consolidations could be happening for some period until momentum picks up again. Probably good time to invest in for medium term.

• If your view is mildly bearish could go for a bull put spread on nifty with strike selected at support resistance zones we discussed for this expiry could work if consolidation and not major bearish moves does not happen next week and same time if market moves up also it could of benefit.

• A 34000-35000 bank nifty strangle with hedges at break even points can give near 1:1 risk reward with the view that this index has resistance at 35K and supports near 34000 on oi and charts.

• Markets did a shake out of weak hands last week and got back into business and probably it was a healthy correction.

• Nifty will hit 16000 sooner but may be consolidating before that.

• The daily charts continue to show that it is at momentum support and a potential bullish divergence move up.

• Nifty Trend crossover to bearishness and Bank nifty falling of 20 moving average support with sideways momentum and trend is reason for a caution but indications of a consolidation ahead and not crash is what could be seen.

• Positional long trades would hold good until a clear signal of  breaking  of major support zones indicated earlier, there is no point in exiting or shorting as of now.

• Intraday even with low volatility regime for some reason is giving choppiness and furious corrections which probably part of bull run behavior.

Expiry Trade : June 17 2021 : IRONFLY

 

  charts courtesy opstra/quantsapp

• IRONFLY at 15750CE and 15750PE sold and hedges bought at 15700 and 15900  is a low risk strategy for this expiry on July 17 2021.Reason for trade is open interest shows likely to expire at 15700 and risk reward is favourable. Trade at your own risk and discretion .

Heading further high without Banks? : Weekly Market Analysis : June 14 2021

• Nifty made yet another (6th consecutive weeks) all time high at 15835.55 and closed with a weekly spinning top candle while the last nifty candle is a Doji indicating indecisiveness.

• Daily candle had been walking on the or close by the bands of Bollinger band with enough volatility expansion.

• Nifty did a small correction to dip to 15566 levels last week before climbing back to gain the momentum in the rally.

• There is a support seen for nifty at 15600 levels from where is bounced up and where it also had a  previous resistance too.

• Fibonacci 23 retracement level of 15430-15330 levels is in confluences with 20 day moving average and also the previous resistance that has turned to be support now for nifty.

• 16000 would be psychological round number and Fibonacci extension resistance area for nifty.

• Nifty momentum on daily/weekly/monthly is intact within bullish zones.

• Nifty Momentum on daily had a confirmed 6 bar bullish positive reverse divergence and nearly met the targets too during last 2 days of the week. However currently momentum  has a bearish divergence on daily chart where price is rising and momentum slowing down that could potentially take it back to previous dip below 15600 if it works out.

• ADX trend indicator strength is rising again and is sufficiently bullish on all timeframes be it short/medium/long term.

• Bank nifty on the contrary o nifty , had 650 point from correction before it recovered 600 of it to still closing below previous close with a bearish near hammer weekly candle patterns. Except on expiry day bank-nifty had bearish candle on all other days.

• The momentum of bank-nifty daily dipped into sideways zone. However on weekly the momentum is showing a range shift from the sideways to bearish zone if it manage to bounce up in the coming week while monthly momentum  is  still taking support at 60 in the bullish zone.

• The ADX trend indicator has crossed over to bearish side on bank-nifty daily timeframe although the strength of it is not rising. The trend continue to be in bullish side on medium and long term timeframes with flat strength.

• Bank-nifty has taken a CIP(change in polarity) bounce from previous resistance area of 34300/34600 levels which is in confluence with Fibonacci 50 and currently taken support at the 20 day moving average at 34800 levels above FIB 38 .The 33500 levels near FIB 61 and previous swing low could be support if above levels are broken next week.

• On the upside Bank-nifty has first resistance at 35800 levels from where it dipped last time and above that we have resistance at previous swing high of 36500 and then all time levels of 37700 levels would be resistance points it has to break if it rallies.

• Open interest data for nifty showing a long buildup while bank-nifty is showing a short buildup based on the futures contracts.

• Highest options call writing for 17 jun expiry is seen at 16000 and then 15800 levels both of which could be major resistance point for nifty rally. call unwinding seen for 15700 levels.

• Bank-nifty options open interest data shows highest call and put writing at 35000 levels which could critical to watch on next week. Large call writing seen at 355000 levels too and supports can be seen below at 34500/34000 levels.

• Put call ratio for nifty accordingly is seen 1.35 which is bullish while 0.73 for bank-nifty is not bullish.

• India VIX fall 7% last week to reach yet another low level of 14.48.Implied volatility is above HIV with IVP remaining 0.4 levels which is the new volatility regime.

• Currently form the futures and options data and charts and indicator it is evident that Bank-nifty continues to be bearish and not supporting the nifty up move.

• Very low volatility regime is not much in favor of option seller while any mean reversion from these levels rising up could benefit option buyers.

• The IT/Metal/Energy/Auto/Infra/FMCG/Pharma are all roaring in bullish momentum.

• Metal sector shows a weekly as well as daily momentum bearish divergence and so caution when u try to be long when it is rally and a buy on dip could be done later on. Pharma has a bearish divergence on momentum currently while Auto has momentum positive reverse divergence on daily and a momentum range shift on weekly which could make bullish moves coming days or weeks.

• .In the cash market FII were buying 3 days except large selloff on Wednesday while DII were buying except on Monday and Friday and June has net near 3000 crore buying so far is positive. They are net long on derivative too.

• US markets are positive now .Dow Jones also taking a momentum support and heading up while S&P and Nasdaq in bullish zone and heading north.

• Dollar Index gained strength and taking momentum support above 90 levels and heading up. USD-INR currency pair taken support at 73 levels with 4 green candles last week and going long on it may not be bad idea.

• Gold is consolidating after the channel breakout on weekly and is at momentum support levels and is likely to move up next week if could hold above the 20 day moving average .

• To wrap up , Selling put options at nifty 16000 levels with hedged spread positions could benefit as swing trade for next week due to fact that nifty may find it not easy to cross it with little support from bank-nifty. However if banking stock especially HDFC kind of index stocks join the party then 16000 would be very close 200 point target that could be covered on any single day gap up itself and so caution and defined risk options strategies need to be implemented. Power sector stocks like ntpc/powergrid/pfc/coalindia are all having a result week and earnings trade on option could be planned .option sellers could benefit from the volatility crush after the event.

Free Training on Options Trading for beginners targeting 1000 youtube channel subscriptions

 
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IRONFLY ON EXPIRY TRADE JUNE 10 2021

 

Iron fly is an options strategy where u have a straddle option position with ATM put and call sold along with a hedge position bought on either side with far OTM put and calls.

On the expiry all premiums within the range of strikes will expire in zero price and this theta decay on the last day is what you benefit from. 

For the risk reward to be favourable the hedge positions need to be bought at beak even point strikes.

options gamma effect could come into play in the afternoon so an entry by 10 am and exit before 1:30 is ideal and target not more than 30-40% of max profit.

Position size lots as per your capital and risk appetite. 

No need to put stop loss as risk is defined .

The margin benefit are another reason for going with such option strategies as against naked option selling or straddles but need to be care full to exit sell positions first before exiting buy position to avoid peak margin issues exit.

This post is not a recommendation and only for educational purpose .This options strategy works most time if done properly. you could backtest yourself on stockmock.in and consult your financial advisor before you put your money on it. 

Bulls continues to be here : Weekend Market Analysis : June 7 2021

                                                             

• Nifty hit new all time high last Monday and then retraced couple of days but to again move even higher to make another all time high at 15734.Banknifty price action was similar but has resistance ahead before breaking all time high of February.

• The last candle on nifty is small body red candle similar to a spinning top on the top of a rally which normally is bearish but may be ruled out after the current long consolidation and breakout rally it has just begun.

• Immediate support levels are below at earlier resistance zones from where is broke out ie 15430-15330 levels and below that near 150000 levels and then50/100  moving average levels near  14800.

• A 15900 could be targeted as per FIB projections for nifty.

• Bank nifty has supports at 34300 levels and resistance are at 36500 and 37700 levels.

• Bank nifty closed with a bearish red candle after a momentum divergence on daily timeframe worked out on Friday and met the target levels.

• Nifty momentum is intact on bullish zones on all timeframes of short/medium/long term.

• Bank nifty currently has a 5 bar bullish positive reverse divergence that could take it to 35800 levels.

• Also make note that on long term monthly timeframe it has a bearish divergence that could cause correction to 30K levels if it works out along with the 100 day moving average continuing above 50 dma on daily timeframe.

• Trend indicators are strong bullish on all timeframes of nifty and trend continues to be rising and bullish for bank nifty as well.

• Nifty and Bank nifty futures data shows short build up on Friday. Nifty options open interest data shows highest resistance at 15700 followed by 16000 and 15800 levels and supports are at 15500 for the 10th June expiry.

• Bank nifty has highest call writing at 35500 followed by 36000 and 36500 levels while supports are at 34500.

• The put call ratio of nifty has dipped to 0.99 which is not very bullish while bank nifty has PCR of 0.65 indicating bearishness for the expiry.

• FII were buying last most  days of last week with good volumes is good news while DII did large selling on last day of week.

• India VIX fall 6.8% last and settled at 15.94 on Friday which is in favor of further up move.

• Implied volatility is above Historical volatility but IV percentile is lowest in recent times of 0.4 in favor of option buyers.

• Sectors of IT,Energy,Metals,Auto,Infra,Services,Midcaps are all in bullish zones.

• US market are rising after a correction and heading to bullish zones.US Dollar index has maintains 90 levels while USDINR pair also taking support at 73 levels. Gold continue to be bullish.

• To wrap up we could see that markets are in a bull run with  5 weeks of higher high and could continue doing same although it may not be doing it slowly that would mean interim corrections after making every new highs.

• So trend is clear and buy on dips is the way to go and with the volatility at lower levels directional trades using option spreads could work out well. Intraday can be played based on price action support resistance levels on options.