How far really is 16000? Weekly Market Analysis : July 26 2021

 

• Weekly bullish hammer candle on Nifty &  indecisive “doji” for  Bank Nifty.

• Nifty had a V shape movement last week fall 2.4% from top and recovered most of it while Bank-nifty did the same falling 4.5% but could not recover much of it(2%).

• Latest nifty daily candle is an indecisive doji while bank-nifty latest candle is bullish kind of hammer.

• Nifty & Bank nifty both continue the Bollinger band volatility contraction within the narrow range.

• Nifty once again facing resistances faced earlier at 15850/15950 along with the rounding number psychological level of 16000.

• Previous swing low levels of  15500 - 15650 is support zone and then 15250-15400 levels below also could act as support levels  and 15000 level is seen if that is broken.

• Bank-nifty facing resistance at 35000 and has 3 previous resistances to clear 36500/37700 and has 34300-34650 levels as next supports below.

• Nifty RSI momentum gave  up previous week bullishness and is back in sideways zones. However the medium to long term momentum is intact in bullish area,

• Nifty weekly bearish momentum divergence that could pull it back to 15450 levels is still work in progress halfway targets.

• Bank Nifty momentum daily gave up momentum gains of previous week and went sideways  current week and weekly momentum also  has slipped slightly into sideways zone . monthly momentum  maintains to be in bullish zones.

• Nifty & Bank Nifty ADX trend indicator gave up bullish trend of last week and has crossed over to bear zones areas on daily but maintain trend bullishness on weekly and monthly timeframes

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

• 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 support is close-by.

• Bank-nifty options open interest data shows highest call writing at 35000 levels while highest put writing seen at 35000/34500  levels that could act as support for the expiry

• Put call ratio for nifty accordingly is seen 1.01 which is bullish while 0.94  for bank-nifty is not bearish.

• India VIX  moves 5%  and continue settle at 11.7 historic low levels last week.

• The Nifty IV 12.1 is above HIV 9.2  and  IVP remaining 0.4  levels 

• IT sector index showing a gravestone doji on daily top and the bearish divergence seen weekly can not be negated. Therefore need caution even though it is bullish. 

• FMCG is consolidating sideways last week forming a weekly doji and at  previous resistance zone and therefore need wait for the momentum catch up.

• Metal has the bullish positive reverse divergence seem to be working and market ended indecisive doji last week. Momentum on daily is slipped back to sideways from previous week bullish zones and need wait for momentum to get back.

• Auto sector continue to be bearish with double top patterns forming on daily and weekly and momentum on dail in bearish zones.

• Pharma forming a small body green candle and is bullish on all timeframes now but weekly has a bearish momentum divergence that could pull it back a bit on weekly basis.

• Last week FII sold> 5400 cr in cash.

• DII bought 5050 cr last that kept the market up last week

• The net longs on derivatives of FII/DII slipped down last week

• US markets recovered from a panic fall previous week and is green and moving up again this week.

• Dollar Index further strengthened at a major resistance zone.W breakout pattern seen.

• Crude Oil fall near 9% and later rebounded recovered most of it.

•  USD-INR currency pair fall near 1% from top and  could consolidate ot reattempt to channel top resistance again next week

•  Gold correct neat 2% last week and could continue bullishness heading to the channel top but with slow momentum.

• India VIX has fallen to lowest 11.7 levels and any spike could benefit vega positive strategies on options like double calendar.

• Therefore Nifty calendar spreads hedged is always bad idea for coming week due to v shape moves often.

• Markets fall &  bounced back once again from the support zones but momentum continue sideways and trend bearish and Bollinger band indicate that 1 month long consolidation continue with not yet breaking out on either side. 

• Trend overall bias is slight bullish with caution since weekly bearish divergence and FII selling concern.

• India vix are at difficult low volatile levels for option traders both buyers and sellers and non directional trades are only to be thought. Will there be immediate mean reversion spike or will it remain at this for long is uncertain.

• 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.

Correction or Consolidation? : Weekly Technical Analysis : July 12 2021

 

• Weekly bearish spinning top candle on Nifty & gravestone Doji candle Bank Nifty.

• Nifty & Bank nifty shows a inverted V shape  ie moving up and then reversing last week on daily.

• Nifty& Bank nifty reversed from previous resistance zone.

• Nifty at a major previous swing low support zone and both indices at channel bottom.

• Latest nifty daily candle Doji-shows indecisiveness, 

• Bank nifty has a hammer  candle pattern on daily potential reversal up.

• Nifty & Bank nifty both has Bollinger band squeeze into narrow range and showing clear volatility contraction /consolidation.

• Nifty once again failed to conquer previous resistances tested tested multiple times of 15900 near an all  time high and rounding number psychological level of 16000 close by.

• It immediate support at  15600 and then 15500 levels below acting good previous swing low supports and 15000 level are seen if that is broken

• Bank nifty has 3 previous resistances to clear/35800/37700/36500 and has 34000-34500 levels as next supports below.

• Nifty RSI momentum has fallen further down and remain in sideways zone on  daily. However medium to long term momentum is intact in bullish area,

• Nifty daily both  bullish positive reverse divergences failed.

• Bank Nifty momentum daily continues to be in sideways zone and falling  .Weekly and monthly momentum  maintains to be in bullish zones.

• Nifty ADX trend indicator continue in  bearish areas on daily timeframe with flat strength while weekly and monthly trend remain bullish with flat strength 

• Bank nifty has ADX trend indicator crossed over back to bearish  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 showing a long unwinding and Bank nifty showing short buildup based on the futures contracts which is bearish.

• Highest options call writing for 01 July expiry is seen at 16000 with 15800/15700 also seen having more writing while 15600  levels shows highest  support point for nifty with 15500/15000 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 0.66  which is not bullish while 0.74  for bank-nifty also is not bullish.

• India VIX  fall near 20%  to historic lowest levels of 11.1 and settled at 12/9 last week.

• The Nifty IV 12.8 is above HIV 7.4  and  IVP remaining 3.1  levels which is at the new low volatility regime. 

• IT sector corrected near 3% but continue with bullish divergence seen weekly with strength in momentum and trend on short/medium/long term charts. 

• FMCG also corrected 1% but continue bullish with momentum bullish divergence seen weekly and could regain momentum to move further up slightly dipped on short term momentum as of now.

• Metal did ok last week but still sideways on short term but medium to long term is bullish and so need wait till momentum pickup and breakout. Currently consolidating.

• Auto sector corrected 4% and lost momentum it gained last week and now is sideways in short / medium term and bullish only on long term.

• Pharma correct 2.5% last week and slipped back to sideways on daily but higher time frames are bullish and could breakout as discussed previous weeks

• Last week FII sold> 2000 crore in cash.

• DII also turned sellers last week after 14 days continuously in cash and sold all bought last week.

• The net longs on derivatives of FII/DII had dipped.

• US markets ended green last week and show hammer pattern on weekly indicating further up move.

• Dollar Index at resistance inverse happen up 92.1 level.

•  USD-INR currency pair at resistance near channel top a Doji on weekly but bullish divergence on weekly.

• Gold continue bullishness and at channel top but with slow momentum and any further moves could make it bullish.

• India VIX has fallen to lowest 12.9 levels and seems to remain at these at least for next week where iron condor weekly may be applied with view that 15900 remain resistance and 15500 may not break for now.

• Therefore Nifty calendar spreads hedged is not bad idea for coming week.

• Markets narrow range bound and at neckline support zone with uncertainty as to how long it could consolidate here and which side it would break down. Therefore trade with caution.

• India vix are at difficult low volatile levels for option traders both buyers and sellers and non directional trades are only to be thought. Will there be immediate mean reversion spike or will it remain at this for long is uncertain.

• Momentum  is sideways and Trend is bearish for short term on both indices and bias is negative.

• 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.

Narrow Range Market :Weekly Market Analysis : July 5 2021

 

• False breakout weekly bearish candle on both Nifty & Bank Nifty.

• Nifty & Bank nifty shows a trending down move entire week on 1 hr charts and given up 20 day moving average support.

• Nifty weekly bearish candle open=high pattern.June month shows a spinning top small body.

• Nifty & Bank nifty seen taken support at previous swing lows.

• Latest nifty daily candle hammer-could be slightly bullish, 

• Bank nifty has a spinning top  candle pattern on daily and June month also has a bearish candle.

• Nifty & Bank nifty both has Bollinger band squeeze into narrow range and showing clear volatility contraction /consolidation.

• Nifty at major resistance confluence of previous resistances tested 5 times and near an all  time high 15915 and rounding number psychological level of 16000 close by.

• It immediate support at  15600 and then 15500 levels below acting good previous swing low supports and 15000 level are seen if that is broken.

• Bank nifty has 3 previous resistances to clear 37700/36500/35800/35300 and currently take  support near 34600-34800 levels and has 34000 as next support below

• Nifty RSI momentum has fallen off from bullish into into sideways zone and seen falling on  daily.However medium to long term momentum is intact in bullish area,

• Nifty daily both  bullish positive reverse divergences failed.

• Bank Nifty momentum daily continues to be in sideways zone and bent up  .Weekly momentum also seems to be slipping into sideways while monthly momentum  maintains to be in bullish zones.

• The bearish monthly momentum divergence seems to have worked out and pulled down bank nifty in June.

• Nifty ADX trend indicator continue in  bearish areas on daily timeframe with flat strength while weekly and monthly trend remain bullish with flat strength.

• Bank nifty has ADX trend indicator last week crossed over back to bearish  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 08 July expiry is seen at 16000 with 15800 also seen having more writing while 15700  levels shows highest  support point for nifty with 15600/15500 support is close by.

• Bank-nifty options open interest data shows highest call writing at 35000 levels while highest put writing seen at 34500  levels that could act as support for the expiry

• Put call ratio for nifty accordingly is seen 0.8  which is not bullish while 0.79  for bank-nifty also is not bullish enough.

• India VIX  fall to historic lowest levels of 12.1 which is more than 10% fall further.

• The IV is above HIV 11.5 and  IVP remaining 0.4  levels which is at the new low volatility regime. 

• IT sector is bullish with strength in momentum and trend on short/medium/long term charts. All time high ending with doji

• FMCG is bullish with momentum bullish 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 shifted and could move up in short term and need wait or some more momentum catchup.

• Pharma has now turned bullish last will with breakout as discussed previous week

• Last week FII sold>  5000 cr in cash did almost no buying net June month.

• Thanks to DII who bought all of last 12 day continuously in cash and June month had buying > 7000 cr that helps market form not crashing.

• The net longs on derivatives of FII/DII had dipped.

• US markets are bullish 

• Dollar Index rising up 92 level.

•  USD-INR currency pair broke out of at resistance zone and hit 75 levels but daily gravestone Doji show bearish pressure as well.

• Gold showing a hammer weekly candle and last week seen to be moving up from the support zone and probably good time to invest in for medium term.

• India VIX has fallen to lowest 12 levels and it could mean revert and therefore vega positive option strategies like calendar spread would be applied to benefit on it. 

• Therefore Nifty calendar spreads hedged is not bad idea for coming week.

• Markets at a narrow range bound phase and there is uncertainty as to how long it could consolidate here and also which side it would break down.Therefore trade with caution.

• India vix are at difficult low volatile levels for option traders both buyers and sellers and non directional trades are only to be thought.

• Momentum  is sideways and Trend is bearish for short term on both indices and bias is negative.

• 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.

Heading further high without Banks? : Weekly Market Analysis : June 14 2021

• Nifty made yet another (6th consecutive weeks) all time high at 15835.55 and closed with a weekly spinning top candle while the last nifty candle is a Doji indicating indecisiveness.

• Daily candle had been walking on the or close by the bands of Bollinger band with enough volatility expansion.

• Nifty did a small correction to dip to 15566 levels last week before climbing back to gain the momentum in the rally.

• There is a support seen for nifty at 15600 levels from where is bounced up and where it also had a  previous resistance too.

• Fibonacci 23 retracement level of 15430-15330 levels is in confluences with 20 day moving average and also the previous resistance that has turned to be support now for nifty.

• 16000 would be psychological round number and Fibonacci extension resistance area for nifty.

• Nifty momentum on daily/weekly/monthly is intact within bullish zones.

• Nifty Momentum on daily had a confirmed 6 bar bullish positive reverse divergence and nearly met the targets too during last 2 days of the week. However currently momentum  has a bearish divergence on daily chart where price is rising and momentum slowing down that could potentially take it back to previous dip below 15600 if it works out.

• ADX trend indicator strength is rising again and is sufficiently bullish on all timeframes be it short/medium/long term.

• Bank nifty on the contrary o nifty , had 650 point from correction before it recovered 600 of it to still closing below previous close with a bearish near hammer weekly candle patterns. Except on expiry day bank-nifty had bearish candle on all other days.

• The momentum of bank-nifty daily dipped into sideways zone. However on weekly the momentum is showing a range shift from the sideways to bearish zone if it manage to bounce up in the coming week while monthly momentum  is  still taking support at 60 in the bullish zone.

• The ADX trend indicator has crossed over to bearish side on bank-nifty daily timeframe although the strength of it is not rising. The trend continue to be in bullish side on medium and long term timeframes with flat strength.

• Bank-nifty has taken a CIP(change in polarity) bounce from previous resistance area of 34300/34600 levels which is in confluence with Fibonacci 50 and currently taken support at the 20 day moving average at 34800 levels above FIB 38 .The 33500 levels near FIB 61 and previous swing low could be support if above levels are broken next week.

• On the upside Bank-nifty has first resistance at 35800 levels from where it dipped last time and above that we have resistance at previous swing high of 36500 and then all time levels of 37700 levels would be resistance points it has to break if it rallies.

• Open interest data for nifty showing a long buildup while bank-nifty is showing a short buildup based on the futures contracts.

• Highest options call writing for 17 jun expiry is seen at 16000 and then 15800 levels both of which could be major resistance point for nifty rally. call unwinding seen for 15700 levels.

• Bank-nifty options open interest data shows highest call and put writing at 35000 levels which could critical to watch on next week. Large call writing seen at 355000 levels too and supports can be seen below at 34500/34000 levels.

• Put call ratio for nifty accordingly is seen 1.35 which is bullish while 0.73 for bank-nifty is not bullish.

• India VIX fall 7% last week to reach yet another low level of 14.48.Implied volatility is above HIV with IVP remaining 0.4 levels which is the new volatility regime.

• Currently form the futures and options data and charts and indicator it is evident that Bank-nifty continues to be bearish and not supporting the nifty up move.

• Very low volatility regime is not much in favor of option seller while any mean reversion from these levels rising up could benefit option buyers.

• The IT/Metal/Energy/Auto/Infra/FMCG/Pharma are all roaring in bullish momentum.

• Metal sector shows a weekly as well as daily momentum bearish divergence and so caution when u try to be long when it is rally and a buy on dip could be done later on. Pharma has a bearish divergence on momentum currently while Auto has momentum positive reverse divergence on daily and a momentum range shift on weekly which could make bullish moves coming days or weeks.

• .In the cash market FII were buying 3 days except large selloff on Wednesday while DII were buying except on Monday and Friday and June has net near 3000 crore buying so far is positive. They are net long on derivative too.

• US markets are positive now .Dow Jones also taking a momentum support and heading up while S&P and Nasdaq in bullish zone and heading north.

• Dollar Index gained strength and taking momentum support above 90 levels and heading up. USD-INR currency pair taken support at 73 levels with 4 green candles last week and going long on it may not be bad idea.

• Gold is consolidating after the channel breakout on weekly and is at momentum support levels and is likely to move up next week if could hold above the 20 day moving average .

• To wrap up , Selling put options at nifty 16000 levels with hedged spread positions could benefit as swing trade for next week due to fact that nifty may find it not easy to cross it with little support from bank-nifty. However if banking stock especially HDFC kind of index stocks join the party then 16000 would be very close 200 point target that could be covered on any single day gap up itself and so caution and defined risk options strategies need to be implemented. Power sector stocks like ntpc/powergrid/pfc/coalindia are all having a result week and earnings trade on option could be planned .option sellers could benefit from the volatility crush after the event.

Bulls continues to be here : Weekend Market Analysis : June 7 2021

                                                             

• Nifty hit new all time high last Monday and then retraced couple of days but to again move even higher to make another all time high at 15734.Banknifty price action was similar but has resistance ahead before breaking all time high of February.

• The last candle on nifty is small body red candle similar to a spinning top on the top of a rally which normally is bearish but may be ruled out after the current long consolidation and breakout rally it has just begun.

• Immediate support levels are below at earlier resistance zones from where is broke out ie 15430-15330 levels and below that near 150000 levels and then50/100  moving average levels near  14800.

• A 15900 could be targeted as per FIB projections for nifty.

• Bank nifty has supports at 34300 levels and resistance are at 36500 and 37700 levels.

• Bank nifty closed with a bearish red candle after a momentum divergence on daily timeframe worked out on Friday and met the target levels.

• Nifty momentum is intact on bullish zones on all timeframes of short/medium/long term.

• Bank nifty currently has a 5 bar bullish positive reverse divergence that could take it to 35800 levels.

• Also make note that on long term monthly timeframe it has a bearish divergence that could cause correction to 30K levels if it works out along with the 100 day moving average continuing above 50 dma on daily timeframe.

• Trend indicators are strong bullish on all timeframes of nifty and trend continues to be rising and bullish for bank nifty as well.

• Nifty and Bank nifty futures data shows short build up on Friday. Nifty options open interest data shows highest resistance at 15700 followed by 16000 and 15800 levels and supports are at 15500 for the 10th June expiry.

• Bank nifty has highest call writing at 35500 followed by 36000 and 36500 levels while supports are at 34500.

• The put call ratio of nifty has dipped to 0.99 which is not very bullish while bank nifty has PCR of 0.65 indicating bearishness for the expiry.

• FII were buying last most  days of last week with good volumes is good news while DII did large selling on last day of week.

• India VIX fall 6.8% last and settled at 15.94 on Friday which is in favor of further up move.

• Implied volatility is above Historical volatility but IV percentile is lowest in recent times of 0.4 in favor of option buyers.

• Sectors of IT,Energy,Metals,Auto,Infra,Services,Midcaps are all in bullish zones.

• US market are rising after a correction and heading to bullish zones.US Dollar index has maintains 90 levels while USDINR pair also taking support at 73 levels. Gold continue to be bullish.

• To wrap up we could see that markets are in a bull run with  5 weeks of higher high and could continue doing same although it may not be doing it slowly that would mean interim corrections after making every new highs.

• So trend is clear and buy on dips is the way to go and with the volatility at lower levels directional trades using option spreads could work out well. Intraday can be played based on price action support resistance levels on options.