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.