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.

Will the breakout sustain?: Weekly Market Technical Analysis : July 19 2021

 

• Weekly bullish candle on Nifty & Bank Nifty.

• Nifty has 5 higher high candle formation entire last week.

• Nifty & Bank Nifty broke out from previous resistance zone. Bank nifty broke out of a inverse head & shoulder neckline.

• Latest nifty daily candle hammer-on uptrend at resistance

• Bank nifty has a open=high candle pattern on daily bearish

• Nifty & Bank nifty both shows beginning of Bollinger band volatility expansion from earlier narrow range.

• Nifty nearer to a rounding number psychological level of 16000 and resistances can be expected.

• Earlie resistances now could act as support and levels of  15750 - 15900 are support zone and then 15500-15600 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 36500/37700 and has 34300-34650 levels as next supports below.

• Nifty RSI momentum climbed to bullish zones last week and retains it. Also the medium to long term momentum is intact in bullish area,

• Nifty weekly has a bearish momentum divergence that could pull it back to 15450 levels if it works out.

• Bank Nifty momentum daily climbed into bullishness but could not sustain it and slipped slightly back into sideways zone on  daily  .Weekly and monthly momentum  maintains to be in bullish zones.

• Nifty & Bank Nifty ADX trend indicator are in  bullish areas on daily, weekly and monthly timeframes

• 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 16200 with 16000 also seen having more writing while 15900  levels shows highest  support point for nifty with 15800 support is close by.

• Bank-nifty options open interest data shows highest call writing at 36000 levels while highest put writing seen at 35500  levels that could act as support for the expiry

• Put call ratio for nifty accordingly is seen 1.03 which is bullish while 0.71  for bank-nifty is not bullish.

• India VIX  fall more than 20%  to historic lowest levels of 10.5  and settled at 11.7 last week.

• The Nifty IV 11.6 is above HIV 6.9  and  IVP remaining 2  levels which is at the new low volatility regime. 

• IT sector corrected more than 2% and later gave up some of it  but bearish divergence seen weekly can not be negated. 

• 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 green last week. Momentum on daily is now in bullish zones and could expect a breakout.

• Auto sector formed a bearish inside bar and consolidating on daily and weekly and may take time to turn bullish again.

• Pharma moved up 2.5% last week and broke out into an all time high levels. but weekly has a bearish momentum divergence that could pull it back a bit on weekly basis. sector is bullish on all timeframes.

• Last week FII sold> 2500 cr in cash.

• DII bought 3200 cr last that kept the market up last week

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

• India VIX has fallen to lowest 11.4 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 broke out from major resistance zone but lost momentum end of week and Bollinger band started expanding while bank nifty need catch up with resistances, with the improved momentum and trend overall bias is 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 of. 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.

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.

Was it just a shake out ?Weekly Market Analysis :June 21 2021

 

• A bearish candle after 5 continuous bullish weeks ,still made another higher high and all time high.

• Weekly spinning top candle is bearish

• Latest Daily candle hammer-could be slightly bullish on confirmation since during a small downtrend. 

• Nifty -moved up 2 days and did 3 days of 450 point correction with a harsh one on Friday to dip it to 15450 support levels last week before recovering back some of the momentum and settling to close to 15683.

• Bank nifty 15o0 point correction before it recovered 650 of it to still closing below previous close 

• Bank nifty has a spinning top bearish candle pattern

• Bank nifty also has 2 days of up-move and 3 days down.

• Last week Nifty broke the support at 15600 levels from where is bounced up and where it also had  at 20 day moving average and  previous resistance too but closed above it.

• Nifty Fibonacci 23 retracement level of 15500-15300 levels is in confluences with the previous resistance that has turned to be support now.15000 would be next level below it which had previous resistance

• Nifty 15800 levels has previous resistances and 16000 would be psychological round number and Fibonacci extension 50 support area.

• Bank Nifty fall off from the 20 moving average support and currently at 34600 level closing above FIB 23.it has 33300/33600 support levels which is in confluence with Fibonacci 38 and previous resistance. Any breaking of FIB 61 levels of 32000 could mean a major downtrend.

• Bank-nifty first resistance at 35600/35800 levels of previous resistance from where it dipped last time and above that resistance at previous swing high of 36500 and then all time levels of 37700 levels would be resistance points.

• Last week Nifty broke the support at 15600 levels from where is bounced up and where it also had  at 20 day moving average and  previous resistance too but closed above it.

• Nifty Fibonacci 23 retracement level of 15500-15300 levels is in confluences with the previous resistance that has turned to be support now.15000 would be next level below it which had previous resistance

• Nifty 15800 levels has previous resistances and 16000 would be psychological round number and Fibonacci extension 50 support area.

• Bank Nifty fall off from the 20 moving average support and currently at 34600 level closing above FIB 23.it has 33300/33600 support levels which is in confluence with Fibonacci 38 and previous resistance. Any breaking of Fib 61 levels of 32000 could mean a major downtrend.

• Bank-nifty first resistance at 35600/35800 levels of previous resistance from where it dipped last time and above that resistance at previous swing high of 36500 and then all time levels of 37700 levels would be resistance points.

• Nifty momentum still daily/weekly/monthly within bullish zones

• Nifty Momentum daily had a bearish divergence on daily chart where price is rising and momentum slowing down that pulled it down to the 15450 levels but managed to recover the momentum and take support in bull zones again.

• Nifty daily now has a bullish positive reverse divergence that could still potentially take it back to all time high on confirmation if it goes above Friday candle high.

• Nifty ADX trend indicator cross to bearish areas on daily timeframe and is rising with reasonable strength while weekly and monthly trend remain bullish.

• Bank Nifty momentum daily continues to be in sideways zone and falling. Weekly is struggling to hold the bullish area while monthly momentum is still taking support at 60 in the bullish zone.

• Bank nifty has ADX trend indicator is in bearish side and rising with strength turning upwards on daily time frame. The trend continue to be in bullish side on medium & long term timeframes with flat strength.

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

• Highest options call writing for 17 june expiry is seen at 16000 with 15800 also seen having more writing while 15000 levels shows major support point for nifty with 15500 support also ahead of it.

• Bank-nifty options open interest data shows highest call writing at 35000 levels while highest put writing seen at 34000  levels that could act as support for the monthly expiry

• Put call ratio for nifty accordingly is seen 1.01 which is mildly bullish while 0.71 for bank-nifty is not bullish.

• India VIX remain flat at very low levels of 14.8.Implied volatility is above HIV with IVP remaining 2.4 levels which is at the new volatility regime.

• IT sector is bullish with strength in momentum and trend on short/medium/long term charts. The FMCG sector was performing despite market bearishness last week.

• We discussed Metal as showing bearish momentum divergence on weekly and it  did correct well. It could take momentum 40 support and consolidate for some period.

• Auto sector bullish momentum divergence failed on daily and it dipped into sideways last week and could be back to bullishness after few weeks if the momentum does not fall into sideways on weekly.

• Pharma and Infra on short term turned sideways but medium and long term momentum is intact.

• Last week on Friday when market corrected and did the v shape recovery In the cash market. Earlier in the week itself they had sold near 2500 crore over 3-4 days. DII also turned into buying moderately after couple of days of selling last week.

• FII were buying 3100 crores is positive with June net buying from FII is 5800 crores while DII where net selling 2300 crore same month till now. They are net longs on derivatives of FII/DII have dipped bit this month so far.

• US markets had the major Fed meeting last week and outcomes jittered all markets including our to certain extend and then recovered soon enough. Both Dow and S&P showing bearish weekly candles.

• Dollar Index gained strength and showed bullish momentum o move from 90 to 92 levels last week and continue heading up resistances seen at 92.5 and 93.5 levels.
• We discussed and suggested that going long on  USD-INR currency pair was not a bad idea in last weekly analysis and it did exactly same and gained near 1.5% last week closing near 74.3 levels at a previous resistance. 

• Gold crashed more nearly 6.5% last week after it was seen consolidating earlier and currently seen back into the weekly channel from where it had done a false breakout earlier. currently at a support zone of previous resistance and close by another support zone 100 point down and consolidations could be happening for some period until momentum picks up again. Probably good time to invest in for medium term.

• If your view is mildly bearish could go for a bull put spread on nifty with strike selected at support resistance zones we discussed for this expiry could work if consolidation and not major bearish moves does not happen next week and same time if market moves up also it could of benefit.

• A 34000-35000 bank nifty strangle with hedges at break even points can give near 1:1 risk reward with the view that this index has resistance at 35K and supports near 34000 on oi and charts.

• Markets did a shake out of weak hands last week and got back into business and probably it was a healthy correction.

• Nifty will hit 16000 sooner but may be consolidating before that.

• The daily charts continue to show that it is at momentum support and a potential bullish divergence move up.

• Nifty Trend crossover to bearishness and Bank nifty falling of 20 moving average support with sideways momentum and trend is reason for a caution but indications of a consolidation ahead and not crash is what could be seen.

• 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.

• Intraday even with low volatility regime for some reason is giving choppiness and furious corrections which probably part of bull run behavior.

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.

Finally outside the bearishness : Weekly Market Analysis : May 24 2021

• Market did a dramatic move last week  with 412 point(2.75%) bounce from 100 dma in 2 days and dipping a 252 point(1.65%) next 2 days and then moving up another 305 point (2%) in a single day finally closing at 15175 conquering major resistances and indicating heading toward another all time high in coming weeks. The major driver for the market action was the Bank nifty making a whopping 2374 point(7.3%) up move last week.

• Nifty has good support of 50 and 100 dma near 14650-14735. All time high is close by and could find some resistance before breaking same.
  

• Bank nifty did a cross over of 100 above 50 dma last week which gives a hint that further bullishness could only happen if 50 dma above 100 crossover happens again. Therefore consolidation could be expected.
  

• Bank nifty could find support at the 50/100 dma at 33250-33400 levels. On the upside 36500 could find resistance since it had multiple previous resistances seen there. 

• Breaking all time high is more than 3000 points away and could find some consolidation in coming weeks ahead before breaking it.
  

• Both indices has a big green candle with open =low normally indicating clear bullishness ahead.

• W double bottom pattern breakout can be clearly seen on daily timeframe on both indices and if we project the breakout target they are indicating it is likely to reach all time high level or beyond

• Looks like on monthly timeframe both indices is doing a change in polarity bullish bounce that could further continue  much ahead. 
  

• Momentum breakout in seen in both indices heading to bullish zones on daily timeframe.

• Weekly momentum which had fallen last week into sideways has reentered the bullish zones on both indices.

• Trend indicators are bullish on both daily ,weekly timeframes and ADX trend strength seem to have turned up and could expect rising in coming days.

• Open interest on futures data is showing that it was a short covering rally that happened on Fridays near 2% move on nifty while bank nifty was clearly long buildup. Options open interest on nifty showing 15000 has large put writing while highest put writing is seen at 14000.major resistance seen at 15500.Banknifty open interest on options is showing support at 33000 and resistance at 35000 levels

• Put Call Ratio is bullish on both indices with 1.23 for nifty and 1.10 on banknify

• FII and DII have turned buyers last week in cash market.

• Banks,energy,auto,pharma,media are sectors seen in bullish zones.

• Globally US market has major correction last weekly following the bitcoin crash , and it is expected to recover from it coming week.The USDINR currency pair has broken 73 levels and could find support around the area. Dollar index also seems to be consolidating and taking support although it broke the 90 levels earlier last week.
  

• Gold has broken out of the trendline channel and seems to be heading north. 

• India vix fall nearly 6% last week closing near 19 which again is good since it has been a volatile >20 levels for long time and another indication that bearishness may have halted for time being. Implied volatility is above historic volatility levels. The IVP has fallen and says that only 1.6% of time in past has been lower  than current IV.
  

• To wrap it up last week showed great strength overall and momentum, trend and price action has at least moved away from bearishness and is looking forward to continuation of bullish cycle after a fair correction. However a recovery of this pace has to slow down before it could further move and therefore next week may see good amount of consolidation next week. I would not recommend take  positional directional positions for next week due to same reason but instead neutral setups with readiness to make adjustment if all time highs are broken. Intraday option trading could be  rewarding if price action is followed with tight stop loss.

When is the breakout?: Weekend Market Analysis : May 17 2021

 

• Last week nifty fall around 2.5% while bank nifty fall 3.5% after an attempt to move up, thereby continuing the consolidation since near 3 months now.

• While bank nifty could not even stay above 100 day moving average , nifty did conquer 50 dma but fall back from the 100 dma , at a major resistance near 15000.

• Nifty currently is taking support at 100 dma with near support at 14150 which is the previous swing low and major resistance above remain the 15050 levels as it is still moving in a trendline channel.

• There is a likely chance of both indexes having a 50 and 100 day moving average cross over to happen after one of the longest gap ever from previous crossover historically and this could mean this bearishness or sideways movement that could continue around 4 months based on average data.

• Bank nifty could find support at 30400 previous swing low levels and major resistance to move up would be 34300 which means above both 50/100 day moving averages and a trendline channel breakout.

• Nifty and bank nifty as daily momentum in the sideways zones and weekly momentum also resisting and moved into sideways.

• Monthly RSI momentum of nifty remain in bullish zones while bank nifty has given up the momentum bullishness for long term.

• Trend remain up for both indexes on ADX on long term while medium term trend is weakly in bullish zones and on daily timeframe trend is strong bearish for short term.

• Open interest analysis on nifty futures shows short covering .options data showing highest call writing 15500 but that may be due hedging but 15000 has a high resistance and 14000 is where supports are seen.

• Open interest analysis on nifty futures shows short buildup. Options data showing highest call writing at 32500/33000 while high supports are seen at 31000 levels.

• Pull call ratio showing bullishness of 1.11 for nifty while it is bearish for bank nifty 0.71.

• India VIX fall 2% last week even though market was falling which could probably mean the fear factor is less and markets may not fall big. IV is higher than historic IV slightly while the IVP says only 32% of time in past has been lower than current IV.

• FII sold heavily last 3 days something around 4000 crores which is a concern.

• Pharma,FMCG,Metal,Energy are sectors seen in bullish zone.

• Overall it is clear consolidation of market that is seen and as long as covid numbers don't further escalate, the market may not fall much and would continue the sideways moves. lowering VIX and nifty PCR indicate same but bearishness of bank nifty and FII selling remain concern for next week.

• Dollar index is falling and could break 90 support levels also but same time USDINR does not show any strength in rupees either. Historically market seen to move up when dollar index falls.

• Neutral options strategies based on support and resistance levels could work out during this phase for short term positional play. Intraday movements are very choppy these days and therefore scalping or directional option buying or selling with strict stop loss could be tried.