How much more of consolidation? : Market Weekend Analysis : May 10 2021

• Last week market fall 1.77% on Monday and then shot up 2.77% up in 4 days finally closing above 50dma with a doji candle.

• Bank nifty attempted for up move but failed to conquer the 100 dma yet.

• Daily Momentum remain sideways on rsi while ADX is falling and weakly bullish on both indexes.

• Nifty managed to close weekly momentum in bullish zones while bank nifty continues sideways on it.

• Monthly momentum and trend both continues to be on upside on indexes.

• Daily nifty is also on window gap support at 14745 levels.

• closing above 15045 would be the first hurdle to cross for us to understand bullishness is here to stay .

• Similarly closing above 34300 on bank nifty would be a channel breakout and close above 100/50dma.

• If an up move does not happen in which case as long as nifty holds the 14150 levels it could mean a continuation of the sideway move and any fall from there has support at 13600 only.

• Bank nifty if it fails to move up then it could dip to 30400 previous swing level.

• Futures build up shows clear long buildup on both indices .

• Options open interest on nifty has large call writing at 15200 and 15000 levels while supports are seen at 14500 which is bullish if we read it along with a a PCR of 1.3/

• Options open interest on bank nifty has large call writing at 34000 levels while supports are seen at 32500 which is clear not bullish if we read it along with a a PCR of 0.9.

• VIX fall down more than 12 % last week which probably indicates the market does not have the fear factor as much as previous week. The IV is above the historic IV levels.

• FII bought only last Thursday and rest 4 days where sellers indicating that big up moves may not happen at least and also potential sell off in case of any trigger.

• Overall there is some kind of bullishness seen in market but bank nifty does not seem to be in line with it.

• Market may not make big moves and continue to consolidate for more time until there is more clarity on uncertainties around and less likely to fall for same reason. Non directional strategies based on support and resistance levels mentioned above could work out. Intraday price action based index trades on strict stop loss also should work out. Positional long or short swing trades need confirmation of a breakout and not recommended  to assume anything.