Index close by 18000.Caution speed breaker ahead? :Weekly Market Analysis :September 27 2021

 

• Nifty  formed Weekly green candle with near 2% bounce from a previous week dip  and later giving up some of it & making yet another all time high which is 1150 point in just 4 weeks. 

• Bank Nifty also formed green candle hockey stick bounce from support but hardly moved up closing nearby previous week close after hitting  exact previous week high.

• Latest nifty daily candle is a spinning top candle on the top of a rally after hitting new all time high  52  points away from 18000 while bank nifty latest candle is also a spinning top candle during an up move at an all time time both indices formed these after a bounce from previous week dip.

• Nifty & Bank nifty has had volatility expansion and is  moving on the bands of Bollinger.

• Both indices are at all time high levels

• The nifty resistance would 17950 and then 18000 while previous support levels at 17650-17700 and 17350-17450 levels swing low levels and below that at 17250-17300 and then near 17000 levels.

• Bank nifty now has  resistance near 38200 and then 38850 and below supports are at 37700 and then 36900-37200  and near 36600-35900 level below it.

• Both Nifty & Bank Nifty  maintains the RSI momentum at bullish zones on all timeframes.

• Nifty easily met target of last week identified bullish momentum divergences . Now it has a bearish divergence  that could be reversal if confirmed

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

• Bank nifty ADX trend indicator is in bull zones last week and is rising and maintains it on all timeframes with good strength.

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

• Highest options call writing for Sept monthly expiry is seen at 18500 with 18000 also seen having more writing while 17000  levels shows highest support point for nifty with 16500 support is next highest support.

• Bank-nifty options open interest data shows highest call writing at 38000 and 40000 levels while highest put writing seen at 37000 and 37500 levels that could act as support for the expiry

• Put call ratio for nifty accordingly is seen 1.12  which is not  bullish while 0.89  for bank-nifty is  near  bullish.

• India VIX  shot up once again  near +2% up move and settled at 16.9

• The Nifty IV 14.8  is above HIV 9.8  and  IVP remaining 26%  levels which seems outside of very low volatility regime and forming nee range.

• IT sector move up near 6% last week but formed a gravestone candle on daily and also a bearish divergence that may be signalling a reversal further up ..Dollar strength is at a resistance  while moving up.

• FMCG did move up near 2.5% but gave back most of it and formed a green inverse hammer closed green with all time high and it has a bullish reverse divergence on daily timeframe and  expectation is that the up move in this defensive sector is likely to continue.

• Metal slipped down near 1%  into sideways but bounced back forming a hammer  and bullish reverse divergence is also seen and stock could be  picked up if it sustains the momentum coming week.

• Auto sector  moved more than 1%  last week up and continue gained short term momentum with price above the support zone but weekly momentum continues to be sideways on short and medium term and may need wait for it to catch up.

• Pharma sector  facing momentum resistance and indecisive on weekly chart second time s and would need momentum to come back and price to move above the resistance on daily in order to looks at stocks in the sector

• Reality is having a weekly cup and handle breakout pattern in progress and last week believe it or not it made 22% up move ..Sector is bullish in momentum and trend on all timeframes and time for stock picking for long entry. 

• Last week FII sold~ 10cr in cash.

• DII bough > 3000cr last week

• The net longs on derivatives of FII/DII has dipped last week.

• US markets all of the  indices closed green hammer patterns indicating the bull presence.previous week were bearish  due to fed meeting.

• Dollar Index further gained strength last week once again attempted to cross the resistance zone above but has not yet.

• Crude Oil moved > 21% in the last 5 weeks at resistance zone at 77  levels which is not good for indian economy..

• USD-INR currency pair heading up closed green this week as well heading towards previous resistance 74 levels.

• Gold dipped last three weeks nearly 5% now when dollar strengthened and now slipped from the previous support zone.

• Markets formed spinning top at an all time high levels on both indices with a bearish divergence on nifty while momentum and trend intact in bullishness at kissing distance from hitting 18000.

• While there is no options other than to be bullish bias caution continue to be needed for a positional long entry at this point due to candlestick pattern and divergence mentioned  and also since no major interim corrections has come in for long.

• India vix has shot upto near 17 levels and could be forming new volatility range now that traders would now have to adjust themselves with especially option sellers who were complaining of low premium.Profit booking can give traps and intraday reversal for option buyers,

• Ration spreads could be something to look for at this volatility levels and using Vertical Spreads in options are likely to give more probable wins as compared to naked long positions during these peak level while positional long trades could remain long till the support levels as indicated earlier are taken away.