When is Bulls taking some rest? :Weekly Market Analysis : September 20 2021

 

• Nifty  formed Weekly green candle with > 2% up move and later giving up some of it & making yet another all time high following a bearish indecisive previous week.

• Bank Nifty formed wider green candle moving > 3% and later giving up some it but mostly importantly closed making an all time after 7 months.

• Latest nifty daily candle is a bull trap bearish candle on the top of a rally after hitting new all time high  10 points away from 17800 from an earlier 5 days of retracement flag formation  while bank nifty latest candle is a spinning top candle during an up move at an all time time formed after a breakout from earlier a week of consolidation flag formation,

• 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 17700-17800 and then 18000 while previous support levels at 17400 and 17250 levels swing low levels and below that near 17000 levels.

• Bank nifty now has  resistance near 37000-38200 and then 38700 and below supports are at 36200-36500 and then 35500-35800  and near 35000 level below it.

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

• Nifty could give 8 bar  bullish momentum divergences which is yet to be confirmed on daily timeframe that could move it up again  if it works out.

• 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 maintains it on all timeframes with good strength.

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

• Highest options call writing for Sept 23 expiry is seen at 18500 with 18000 also seen having more writing while 17000  levels shows highest support point for nifty with 17800 support is next highest support.

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

• Put call ratio for nifty accordingly is seen 0.79  which is not  bullish while 0.89  for bank-nifty is  near  bullish.

• India VIX  shot up once again  +8% up move and settled at 15.2

• The Nifty IV 13.85  is above HIV 5.5  and  IVP remaining 23.4%  levels which seems slowly coming out of very low volatility regime. 

• IT sector index moved further up and the daily reverse divergence worked well to meet targets it  gave up  half of the near 4% move  in the last two days .Dollar strength continue  heading up.However weekly diluted divergence cannot be negated.

• FMCG moved up near 2% but gave back most of it and managed close green all time high and it now 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 into sideways momentum when it met resistance once again failing the bullish reverse divergence and remain flat with a bearish candle  and stock could be  picked as it take regains the momentum at the bull zones.

• Auto sector  moved more than 2%  last week up and has 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 charts 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 formed a small body inverted hammer showing bearish pressure .Sector is bullish in momentum and trend on all timeframes and time for stock picking for long entry. 

• Last week FII bought > 6465 cr in cash.

• DII sold > 2900 cr last week

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

• US markets all of the  indices closed red last two weeks from the all time high levels.

• Dollar Index further gained strength last week once again attempting to cross the resistance zone above.

• Crude Oil moved > 17% in the last 4 weeks at resistance zone at 74,5 levels.

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

• Gold dipped last two weeks more than 4% now when dollar strengthened and now hanging at the previous support zone.

• Markets with roaring bulls at all time high level with banks also breaking out of near 7 month resistance and momentum and trend indicator at extreme levels and all eyes set on 18K.

• While there is no options other than to be bullish bias caution continue to be needed for a positional long entry at this point since US market were red last two weeks and no major interim corrections has come in for long.

• India vix has shot back to 15.2 levels and could be forming new volatility range now that traders would now have to adjust themselves with.Trending moves could have helped buyers previous week.

• Vertical Spreads in options are likely to give more probable wins as compared to naked long positions during these peak levels as reversals due to profit booking could come in, while positional long trades could remain long till the support levels as indicated earlier are taken away.