REVERSAL TO NEW HIGHS AHEAD OF FED RATE CUT? :Weekly Stock Market Analysis :Sept 16 2024

 #nifty  #banknifty   #stockmarketanalysis  #technicalanalysis  #stockmarketreview  #weeklymarketreview 

REVERSAL TO NEW HIGHS  AHEAD OF FED RATE CUT? :Weekly Stock Market Analysis :Sept 16 2024

Youtube :  https://youtu.be/w3ZtkqVG6II

BREAKING OUT AGAIN.BANKS TO CATCH UP? :Weekly Stock Market Analysis :Sept 2 2024

 #nifty  #banknifty   #stockmarketanalysis  #technicalanalysis  #stockmarketreview  #weeklymarketreview 

BREAKING OUT AGAIN.BANKS TO CATCH UP? :Weekly Stock Market Analysis :Sept 2 2024

Youtube :  https://youtu.be/FIqtsmKegIw

RECOVERY TO SUSTAIN ?:Weekly Stock Market Analysis :Aug 19 2024

 #nifty  #banknifty   #stockmarketanalysis  #technicalanalysis  #stockmarketreview  #weeklymarketreview 

RECOVERY TO SUSTAIN ?:Weekly Stock Market Analysis :Aug 19 2024

Youtube :  https://youtu.be/CuUaCfJ2EBg

HEATED UP MARKETS WITH MOMENTUM DEFICIENT BANK INDEX AHEAD OF BUDGET ? :Weekly Stock Market Analysis :July 15 2024

#nifty  #banknifty   #stockmarketanalysis  #technicalanalysis  #stockmarketreview  #weeklymarketreview 

HEATED UP MARKETS WITH MOMENTUM DEFICIENT BANK INDEX AHEAD OF BUDGET ? :Weekly Stock Market Analysis :July 15 2024

Youtube : https://youtu.be/z8IQ0tM7TGM

EUPHORIA FOLLOWED BY REALTY CHECK.WILL THE RECOVERY SUSTAIN ? :Weekly Stock Market Analysis :June 10 2024

 #nifty  #banknifty   #stockmarketanalysis  #technicalanalysis  #stockmarketreview  #weeklymarketreview 

EUPHORIA FOLLOWED BY REALTY CHECK.WILL THE RECOVERY SUSTAIN ? :Weekly Stock Market Analysis :June 10 2024

Youtube : https://youtu.be/7UiM8zGhrPs

POSITIVE CLOSE.WILL THE RECOVERY SUSTAIN? :Daily Stock Market Analysis :April 23 2024

 #nifty  #banknifty   #stockmarketanalysis  #technicalanalysis  #stockmarketreview  #premarketanalysis

POSITIVE CLOSE.WILL THE RECOVERY SUSTAIN? :Daily Stock Market Analysis :April 23 2024

Youtube :  https://youtu.be/rceHfICgyTU

Need to consider Position size also during backtest trading systems

How many of us have ‘risk reward ratio’ considered while backtesting a trading system in options ?

Mostly we consider entry rules based mostly based on price action parameters or use various indicators like MA,RSI etc.etc.

However these could work out very well as long as the market volatility is normal and not during the time when volatility ranges are beyond the usual ranges below lets us say ~20 . As we know premiums of options spike to very high before a minor or major event like earnings, budget etc etc. and we would still be getting the best entry signals on such high volatility days but just by not considering the Risk Risk reward and 

In order to make it simple let us say we have 10 lakh capital and 1%  of that (10000/-) u are deploying for a strategy and say your risk for the trade is 1000/- (depending on where and how. you place your stop loss) meaning you would buy only as much quantity of traded instrument within 10000/- and would take loss per trade 1000/- . Now the stop loss could most likely be based on any of the indicators  or pattern high/lows etc and the option premiums for them keep changing depending on volatility in the market.. and same strategy could give signal but risk may vary with volatility. So you may end up taking > 1000/- risk or a cut of trade on 1000/-  both of which could go against you and could surprise your backtest result based assumptions.

Taking stop loss based on ATR indicator could be a solution but that may not be case always for all strategies.

Therefore Position size the entry well or rather ignore if they don’t fit into your risk reward then  all the back testing does not help as mostly the profits your made from your system could easily be taken away in few periods of such days where it becomes crucial to decide how much to sell or why not to trade?

Trading with abnormal premiums with all other signals right does not help trading psychology well and there Is every chance that you get out early or do all other mistakes possible.

Therefore having entry exit and stop loss rules alone does not make your backtesting complete but a plan to the volatility ranges to not trade or reduce position size as well.

Options Trading Facts 1

 

• If you like do intraday options trading probably you like to be more into the action part of trading and does not like sit idle much and eager to participate and see results quicker 

• While the fact is that you are less likely to be  more profitable than a positional/ swing trading unless you have higher capital or take higher risk or both.

• Being more active or less both are fine as long as it fits into your mindset  but what really matters is to maintain same consistently always. 

• Just like the option buying being profitable Is harder than option selling It is no doubt that decision making on either way on smaller timeframes is more harder than other way.

• Backtesting your rules gives you much more confidence than otherwise in order to stick to your rules in your real trade. But Truly how many retailers in options selling has backtested solid rules for every different market cycles and stick to it ?

• Do make sure plan to put that money into short/medium/long investing in good quality stocks on mutual funds or other liquid funds as per your risk appetite, time horizon and expertise so as to benefit from the  additional collateral benefit  for option selling capital from it by pledging them.

• Intraday option trading also gives risk like freak trades scenarios since hedging used only margin with far tom and stop loss may misfire

• Intraday volatility brings in high volatility without having enough lesser reflex action timeframe ignorer to judge and decide the bet adjustment options even with experience.

• No matter you look at open interest or volatility or chart levels or greeks  ,end of the day options trading is speculative and all the traders  skills narrows down to how much of your probabilities of your anticipated price range went right or wrong.

• If you have finally managed to learned the tricks of the game hard way over the years and also made small but decent money in options trading, in order for wealth generation.

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.

BULL. PUT SPREAD ON NIFTY : EXPIRY TRADE

 

NIFTY JUNE 2021 MONTHLY EXPIRY 15700PE BUY AND 15900PE SELL

Bull put spread is used when u have mild bearish view on the stock or index. It is expected that 15800 since having good resistance in open interest and also on charts it is unlikely to cross it but same time and attempt may be made following reliance agm meeting at 2pm. Book profit at 50% of max profit and exit at 50% of max profit as stop loss. Probability of being profitable  is 50% and risk reward is fine for the intraday.Trade at your own risk and discretion.

Expiry Trade : June 17 2021 : IRONFLY

 

  charts courtesy opstra/quantsapp

• IRONFLY at 15750CE and 15750PE sold and hedges bought at 15700 and 15900  is a low risk strategy for this expiry on July 17 2021.Reason for trade is open interest shows likely to expire at 15700 and risk reward is favourable. Trade at your own risk and discretion .

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.

Free Training on Options Trading for beginners targeting 1000 youtube channel subscriptions

 
Please subscribe and share to your friends. Free training on options trading once seekedge youtube channel hits 1000 subscription. Here is the link  https://bit.ly/3cfComV

IRONFLY ON EXPIRY TRADE JUNE 10 2021

 

Iron fly is an options strategy where u have a straddle option position with ATM put and call sold along with a hedge position bought on either side with far OTM put and calls.

On the expiry all premiums within the range of strikes will expire in zero price and this theta decay on the last day is what you benefit from. 

For the risk reward to be favourable the hedge positions need to be bought at beak even point strikes.

options gamma effect could come into play in the afternoon so an entry by 10 am and exit before 1:30 is ideal and target not more than 30-40% of max profit.

Position size lots as per your capital and risk appetite. 

No need to put stop loss as risk is defined .

The margin benefit are another reason for going with such option strategies as against naked option selling or straddles but need to be care full to exit sell positions first before exiting buy position to avoid peak margin issues exit.

This post is not a recommendation and only for educational purpose .This options strategy works most time if done properly. you could backtest yourself on stockmock.in and consult your financial advisor before you put your money on it. 

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.

Bulls are here: Weekend Market Analysis : May 29 2021

• Market rallied more than 2% last week after the breakout on previous Friday and settled few points above the last previous all time high with two consecutive small body candle days indicating tough presence of both bulls and bears. Bank nifty also moved more than 2% but ended in red end of week.

• Nifty corrected around 8% in around 3.5 months from previous swing high before reaching back there last day. Bank nifty corrected nearly 20%  and yet to go back there

• Nifty which has close above all time high has Fibonacci extension projection from previous swing low indicate it an up move happen it could move up to at least 15900 levels.

• A double bottom breakout W pattern is clear visible like last week on both indices  indicating there is a good breakout potential from current levels.

• Nifty has a small gap support between last two candles could work out well if there is minor retracement before moving up further.

• 15050 is the best support downwards from where it had broken out earlier. If by any chance that is broken there is 50/100 moving average to support at 14750 levels.

• Bank nifty has not yet reached all time high which is more than 2500 point away but could face hurdles both at 36400 previous swing high levels and 37700 all time high levels before that.

• Bank nifty has support at 34300 levels from where it broke out earlier and below that it could find support near 33000-33250 levels at the moving averages and trendline channel.

• RSI momentum is on bullish zoned on all timeframes (short/medium/long term)for both indices.

• Daily timeframe(short term) is showing how a momentum range shift into bullish zones worked out well on bank nifty.

• The monthly candles(yet to close) are very bullish green long for nifty and bank nifty.

• However  could come out with a potential bearish momentum divergence on monthly candle depending on close of Monday if momentum is not moving up from current which may indicate correction up to 30400 levels but on a longer term basis  only if it works out. 

• Trend indicator ADX/DMI has turned up and rising on all timeframes for both indices indicating clear bullishness ahead.

• Futures open interest is bullish long build up on both indices.

• Open interest on nifty options shows that 15500 has higher call writing while 15300 could be good support for next expiry.

• Bank nifty open interest data shows 35500 as resistance level while 35000 has highest support level seen although a large writing is still seen there which could mean next week may see more bull bear tug of war before decisively conquering it meanwhile 34500 is immediate support below it.

• Put call ratio is bullish for nifty 1.32 but not bullish for bank nifty at 0.75

• India VIX fall more than 16% last week alone and has reach 17.4 pre-pandemic levels. This is further confirmation that bullishness may be continuing ahead. The covid case rate and sentiments has brought down VIX probably.

• Implied volatility is above historic IV levels and IVP has fallen from 70 to 0.8 low levels indicating only 0.8% of time in past year has been lower  than current IV. Currently IV is sharp falling phase  and premium \of option also may be less.

• IT,Energy,Auto,Infra are other sectors seen in the bullish zones.

• FII where buying good last week except for Thursday. 

• Dollar index has regained the 90 price level and seems reverting while USDINR trades with rupee strengthened to 72.4 levels and look like bottom may have been hit and could hover around there or revert from there. Gold continues the rally up after the trendline breakout.

• Overall market having a nice round patter with potential for a very good breakout after a fair correction and going short is out of question while the nature of  further up move could be a slow trending rather than an upright breakout to hit 16K.Therefore credit/debt directional spreads based long trades on option could give results while directional momentum breakout trades with stop loss intraday could be effective as well.

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.

Consolidation to continue ? : Nifty weekend analysis : May 3 2021

• More than 5% index up move previous week and then in two days gave up 3 % of that after hitting a 15K resistance giving up the 50 dma also that was conquered earlier.

• The price momentum has taken a resistance and turned downward before climbing into the bullish zones. However it still has the support of 20 and 100 dma and still within the trendline channel support.

• Bollinger band shows a consolidation clearly. 14450,14150 and 13600 are seen as supports if it falls off the channel and below the 20 dma support it has taken at 14600.

• 15000 would be hurdle to close if nifty stop the fall and reverse.

• Although the trend has again crossed over to bearish zones both in daily but with ADX falling down showing the bearishness could be short-lived. weekly trend is bullish but ADX is not rising.

• Monthly RSI momentum as well as ADX trend continue to be bullish although weekly momentum is still at resistance.

• Open interest on futures shows short buildup while options data shows highest call writing is at 15000 levels while the support levels seen at 14000 for the next expiry.

• PCR is not bullish yet on nifty at 1.06.

• Bank nifty also made up move as nifty on charts last week but hit the resistance at 50 dma and lost the earlier conquered.

• 100 dma also in the previous 2 days of down move. Support levels are seen at 30400 and 29000 levels if it continue\the down move on Monday. 

• Banknifty also lost the rsi momentum at hit resistance at 34000 levels. Bank nifty trend can be said as having a  weak bearishness on ADX.

• Bank nifty has Weekly trend is bullish but ADX is not rising. But Monthly RSI momentum as well as ADX trend continue to be bullish although weekly momentum is still at resistance.

• Climbing the 50 and 100 dma and closing above it could bring back bullishness in bank nifty.

• Current bearish trend does not have strength if u look at ADX of bank nifty.

• Open interest if bank nifty future is showing long unwinding meaning both price and open interest are falling and is bearish. Options data shows resistance at 34000 levels and support at 32000.

• PCR is not bullish yet on bank nifty at 0.82

• India Vix actually fall overall last week it by  4% and then moved up finally settled at 23 levels.

• Nifty IV is slightly above historic IV and and IVP also has fallen 10 points at 68

• FII sold nearly 3500 crore selling on Friday is a big concern.

• US market remain bullish but local cues are bearish due to covid uncertainty

• Pharma was only sector seen bullish on last trading day.

• Overall the markets are very volatile and doing a consolidation but same time not yet ready to have a crash due to the uncertainty. As long as local cues improve or no major worse news comes in a crash may not happen though there is probability of testing the previous swing lows and then continue the consolidation for weeks ahead until positive news flows in. Intraday trades can be made on support resistance levels without much issue but going bearish or bullish positional or swing trades should be only after the direction  confirmation is clear enough.

Option Set up of the week : April W1

Current Nifty spot 14867

Short NIFTY08Apr2021.15050CE 1 lot @64.40

Long NIFTY08Apr2021.14900CE 1 lot @119.00

Maximum Profit Potential= 7,155.00/-

Maximum Loss Risk =-4,095.00

Breakeven level =14,954.60

Capital needed approx.     < 25000/-

Risk reward 1:1.3

Exit if profit >15-25% of capital or Loss > 7000 

Probability of profit = 40%

Reason : nifty could move with current momentum and cross 15000 this week.

Options Set up for the Week : March W4

Current Nifty spot 14507

Short NIFTY01Apr2021.14200PE  1 lot @34.7

Long  NIFTY01Apr2021.14800PE  1 lot @280.7

Maximum Profit Potential =26,550/-

Maximum Loss Risk = -18,450/-

Breakeven =14555

Capital needed approx.     < 25000/-

Risk reward 1:1.4

Exit if profit >15-25% of capital or Loss > 12000 

Probability of profit = 55%

Reason : nifty could fall some more from current levels or attempt to move  up some more and settle around 14500. Skip trade if large gapup opening.