Will next week see some retrace for Bank-nifty to catchup?:Weekly Market Analysis: Sept 06 2021

 

• Weekly wide range bullish candle on Nifty making yet another all time high where it accelerated nearly 5.5%  on the upside.

• Nearly 4% up move from previous week  in Bank Nifty forming a a bullish wide range candle dealing with 37000 now.

• Latest nifty daily candle is also a green small body candle pattern while banknifty latest candle is a spinning top candle during an up move at a rounding number resistance zone.

• Nifty has the volatility expansion  while Bank nifty has the bollinger band volatility  had expanded slightly previous weeks and started moving on the bands.

• Nifty made big moves last week another all time high level hitting  17323 while banknifty also shot up and hit a resistance zone and question now is front is when is it slowing down ?

• The nifty resistance would 17350  and then 17450 /17500 while previous support levels at 17050-17150 and 16700 levels and below that 16375 swing low levels could  also act as  support zone.

• Bank nifty has  resistance near 37000 and then 37700 above t which is previous all time high 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 has bearish momentum divergences (diluted by more candles)seen therefore need  some cautious bullishness.

• Nifty ADX trend indicator trend is bullish and rising and with strength  also rising  up on and maintain  same 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 rising strength.

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

• Highest options call writing for Sept 09 expiry is seen at 18000 with 17500 also seen having more writing while 17200  levels shows highest support point for nifty with 17000 support is closeby.

• Bank-nifty options open interest data shows highest call writing at 37000 and 38000 levels while highest put writing also seen at 36000 and 36500  levels that could act as support for the expiry

• Put call ratio for nifty accordingly is seen 1.07 which is bullish while 0.72  for bank-nifty is  also near  bullish.

• India VIX  shot up ~8.8% after previous week 5% dip and settled at 14.54

• The Nifty IV 12.9 is above HIV 8  and  IVP remaining 15%  levels which is at the low volatility regime. 

• IT sector index once again moved up ~2% last week despite dollar weakness and the bearish divergence seen weekly can not be negated yet even though diluted with more candles.Therefore need slightly caution even though it is bullish.Dollar strength has weakened as well,

• FMCG further !4% this week  after the breakout previous 2 weeks and sector index formed a wide rang bullish candle and expectation is that the up move in this defensive sector is likely to continue.

• Metal moved nearly ~5% move when the bullish reverse divergence of momentum identified previous week seems to be working when it took a bounce from  momentum support zone on weekly  and daily momentum is expected to catch up and stock could be  picked as it take support at rsi 40 or above gets into bull zones.

• Auto sector  moved up ~2% last week toward double top neckline on weekly double top pattern and previous weeks bearish view could be negated if momentum further catches up instead of falling.

• Pharma sector  made a reversal of more than 4% move forming bullish wide range candle after taking support and momentum is in near bullish zones  n daily and weekly could be that it could move up again and time for stocks in the sector to be added to watchlist.

• Last week FII bought > 6850 cr in cash all days buying.

• DII sold 1400  cr last week

• The net longs on derivatives of FII/DII were rising last week.

• US markets  indices nasdaq/s&p rose up and closed green weekly while dow went flat indices following. Fed chair announcement on taper /interest last weekend.

• Dollar Index further fallen nearly 0.8% last week after a false break out at resistance on weekly W pattern.

• Crude Oil once again shot  up to 73 levels and  settled near  72  previous week forming an indecisive doji.

• USD-INR currency pair further fall ~0.75% again to close 72.9 levels and could have impact on IT rally next week.

• Gold closed green for 4 week after the previous recovery hammer bouncing from the major support zone and now forming a small body after hitting a previous resistance and close by channel top could continue bullishness but with slow momentum.

• Markets are roaring bullish non stop at one again at  all time high levels showing the bulls are here to  stay for long.

• Overall bias is  mildly bullish just due to the fact that market moved 900 points and could do some small consolidation and so caution is the word instead of positional entries at this point.

• Given that bank nifty also joined the up move indicate that 18000 is also possible soon since that index still has long catchup to do.

• India vix fall shot up to 14.5  levels more than 8% weekly after previous week dip and Lower IV and Vix spikes continue difficult for non directional option traders. intraday spike that occur and IV shapes are frequent making intraday trading also not easy.recent new margin rules and freak trades added up to it.

• Swing positions hedged based on iron-fly or calendar spreads are likely to give more probably wins while Positional long trades could remain long till the support levels as indicated earlier are taken away