Will Bank nifty Breakout or take time or break down ?:Weekly Market Analysis : September 13 2021

 

• Weekly ended with an indecisive Doji candle on Nifty making yet another all time high where it was consolidating mostly during this truncated week.

• ‘V’ shape move when Bank Nifty dipped more than 2% and later recovered some of it forming a a hammer inside candle still dealing with 37000.

• Latest nifty daily candle is green inside bar pattern while bank nifty latest candle is a spinning top candle during an up move at a rounding number resistance zone.

• Nifty has had volatility expansion earlier itself while Bank nifty also had the Bollinger band volatility  expansion  previous weeks and started moving on the bands.

• Nifty consolidated last week same time making another all time high level hitting  resistance near 17450  while banknifty dipped and recovered and hit a resistance zone near  37000 .

• The nifty resistance would 17450  and then 17750 while previous support levels at 17050-17150 and 16700 levels swing low levels .

• Bank nifty has  resistance near 37000 and then 37700 above  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.

• BankNifty has a range shift and bullish momentum divergences in progress on daily timeframe that could move it up.

• Nifty ADX trend indicator trend is bullish and rising and with 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 buildup   based on the futures contracts.

• Highest options call writing for Sept 16 expiry is seen at 18000 with 17400 also seen having more writing while 16500  levels shows highest support point for nifty with 17300 support is next highest support.

• Bank-nifty options open interest data shows highest call writing at 37500 and 37000 levels while highest put writing also seen at 34000 and 36000/36500  levels that could act as support for the expiry

• Put call ratio for nifty accordingly is seen 1.14 which is bullish while 0.84  for bank-nifty is  also near  bullish.

• India VIX  fell  near 8% after previous week +8% up move and settled at 13.9

• The Nifty IV 13 is above HIV 6.3  and  IVP remaining 16%  levels which is at the low volatility regime. 

• IT sector index fell nearly 2% last week after non stop rally for long forming a spinning top weekly candle .There is daily bullish reverse divergence in play which could move it up again. Dollar strength that had earlier weakened now is again heading up. However weekly diluted divergence cannot be negated.

• FMCG consolidated a bit after the breakout moves of previous weeks and sector index formed a weekly hammer candle at an all time high level and expectation is that the up move in this defensive sector is likely to continue.

• Metal consolidated to form a weekly indecisive doji after previous week up move following bullish reverse divergence of momentum which seems to be still in play  and daily momentum continue sideways and expected to catch up and stock could be  picked as it take support at rsi 40 or above gets into bull zones.

• Auto sector  dipped more than 1%  last week up after the previous weeks ~2% reversal move but momentum continues to be sideways on short and medium term and may need wait for it to catch up.

• Pharma sector  also dipped more than 1.5% after previous weeks reversal bullish move and has sideways momentum on short and medium timeframes.

• Reality is having a weekly cup and handle breakout pattern in progress formed a small body indecisive doji showing bearish pressure at top after a previous week 11% bullish up move. Sector is bullish in momentum and trend on all timeframes and time for stock picking for long entry. 

• Last week FII sold > 1100 cr in cash.

• DII sold > 1100  cr last week

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

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

• Dollar Index regained strength last week once again attempting to cross the resistance zone it is currently at.

• Crude Oil remains in the resistance zone at 72.3 levels.

• USD-INR currency pair rebounded nearly 1.25% form the channel end to close above 73.5 levels.

• Gold dipped more than 2.5% last week when dollar strengthened where is hit channel top resistance and now back to previous support zone.

• Markets consolidating at an all time high levels forming a weekly doji on top with banknifty yet to break out of the February levels.

• Overall bias is  mildly bullish just due to the fact that momentum and trend indicators are super bullish with banknifty having bullish reverse divergence too and showing higher high high low price action. However caution continue to be needed for a positional long entry at this point unless another breakout candle appears again.

• If any breakout moves on bank nifty from previous resistances happen then would mean 18000 on nifty is not very far away. 

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

• Calendar spreads are likely to give more probably wins as volatility spike continue from lower levels while Positional long trades could remain long till the support levels as indicated earlier are taken away.