Nifty Heading to 17000 if BankIndex catches up? : Weekly Market Analysis : Aug 16 2021

 

• Weekly wide range bullish green breakout candle on Nifty at an All time high & nearly 1.3% move bullish  green candle  for  BankNifty and it broke the 25 week old 36000 on weekly basis.

• Nifty broke out from a 4 day long consolidation after a previous breakout week making near to 2% up move while Banknifty did made good moves and later retraced nearly 0.5% of it.

• Latest nifty daily candle a 1% wide green bullish breakout candle pattern that may be indicating further up move while banknifty latest candle is continue as inside candle of a 2 day back bearish candle and  closed  with green but yet to breakout from the 7 day old consolidation after a previous breakout week and is likely to catch up with nifty next week.

• Nifty has the volatility expansion  while Bank nifty has the Bollinger band volatility expansion  began slightly.

• Nifty at an All time high level of above 16500 and 16000 history in a week trading

• Previous resistances b and b are new support with b rounding no also and swing low levels of  15850-15950 & 15500 - 15650 will also act as  support zone and then 15250-15400 levels below .On the upside it is uncharted and 16550/16800 could be projected.

• Banknifty broke 25 week old resistance of 36000  with resistances above 36500/37700 and below supports are at 35700-35900 and 34400-34700.

• Nifty & Banknifty RSI momentum shifted into bullish zones on all timeframes.

• No divergences of momentum seen.

• Nifty ADX trend indicator trend is bullish and rising and with strength  also rising  up on daily and  maintain  the trend bullishness on weekly and monthly timeframes.

• Bank nifty ADX trend indicator now is in bullish zones showing  not rising on daily timeframes and weekly and monthly also maintain the bullish trend.

• Open interest data for Nifty & Bank nifty showing a long  buildup based on the futures contracts.

• Highest options call writing for 18 Aug expiry is seen at 16800 with 17000 also seen having more writing while 16400  levels shows highest support point for nifty with 16300 support is close by.

• Bank-nifty options open interest data shows highest call writing at 36000 and 38000 levels while highest put writing also seen at 36000 and 34500  levels that could act as support for the expiry

• Put call ratio for nifty accordingly is seen 1.67 which is bullish while 0.97  for bank-nifty is  not bullish.

• India VIX  stayed nearly flat  and settle at 12.9 and continue to be low levels last week after a spike.

• The Nifty IV 12.9 is above HIV 6.3  and  IVP remaining 11.5  levels which is at the low volatility regime. 

• IT sector index moved up ~5% last week and the bearish divergence seen weekly can not be negated.Therefore need slightly caution even though it is bullish.Dollar strength could be behind the bullishness.

• FMCG moved up slightly  ~1%  last week but form a dragonfly doji candle un certainty. there is a momentum bearish divergence on weekly  and therefore need cautiously wait for the momentum catch up again.

• Metal moved flat and form a hammer pattern on this index which show bulls presence. Now a bearish momentum divergence exit in the up move but could be cautiously bullish.

• Auto sector was bearish or flat last week and continue consolidating  on daily for a potential up move breakout later.

• Pharma sector has gone into sideways momentum again with a bearish wide range candle  and bullish momentum is negated and seems to be earlier bearish divergence  continuing bringing it down.Now at a previous support zone and could bounce as well.

• Last week FII bought > 870 cr in cash.

• DII bought 635  cr last week

• The net longs on derivatives of FII/DII moved flat last week.

• US markets closed  with  green candles weekly on all major indices.

• Dollar Index weakened to form bearish inverted  candle to take support while earlier week it was heading to neckline resistance zone of W breakout pattern seen.

• Crude Oil fall some more and settled below 70 for the week which could be positive for economy.

•  USD-INR currency pair has uncertainty doji candle and seems consolidating at previous support zone.

•  Gold crashed more than 5% last week and then recovered almost aloof it and could continue bullishness heading to the channel top but with slow momentum.

• Markets is at all time high level break out mode from previous long consolidation although banknifty continue to have previous resistances to clear ahead before a real breakout.

• Overall bias continue  bullish on momentum and now should wait for further break out of banknifty. Suddenly market dynamics changed and trade with caution since major corrections occur when least expected but it makes one more bullish when institutional selling is not seen anymore despite dollar strengthening new trigger played last weeks.

• India vix are at difficult low volatile levels for option traders both buyers and sellers.Trending market is difficult for non directional option traders. Despite low vix there are many intraday spike that occur and V shapes are frequent making intraday trading not easy.

• Positional long trades can continue to trail the stop loss to new support levels and could follow the trend until a clear signal of  breaking  of major support zones indicated earlier.