Nifty Weekly Analysis for the week ending 23 June 2017

Last week we discussed “Now Nifty is crucially near uptrending channel and obeying the 8 days down trending channel.   Market should break the prevailing trend decisively in order to gain further momentum…. For further upmove Nifty should close above ELB high.  ”.  Nifty made a sharp pull back and closed above prevailing 8 days down trending channel on First day of week itself but failed to maintain same momentum in coming days and was unable close above ELB high .  Nifty made another identical bearish candle compared to last week candle but hold the low of last week.  In case of Sensex, it made a new high in this week and made upper long legged doji candle.

Nifty opened the week at 9626.4, made a high of 9698.85, low of 9565.3  and closed the week at  9574.95. Thus it closed the week with a loss of 13 points (-0.014%).  

First day of the week, Nifty made higher low and higher high on daily chart and managed to close above Friday’s high  On daily chart, formed a strong bull candle in 15 days.   On Tuesday Nifty made another high but failed to keep previous days momentum and made bearish candle On Wednesday, Nifty made gap down opening and made another bearish candle.  On Thursday, Nifty opened positive, made high above previous two days.  Sensex made new record high.  Market lost all the gain in the second session of the day and closed flat with negative bias.  On Friday, Nifty made another bear candle, lost all the gain made during the week and closed below 20 day moving average.   

• As mentioned above Nifty closed below 20 day moving average.   Earlier  Nifty closed below 20 day moving average in April and May.  This is the third time nifty closed below 20 day moving average since December 2016.   In the previous two occasions, Nifty reversed and made a hefty 457 points in April and a 368 points in May. 

• Nifty made two consecutive bearish candle this week.  Earlier Nifty made two consecutive bearish candles in April since December 2016.  In previous the occasions, Nifty reversed the trend and made 579 points. 

• In previous months, Nifty made bullish moves in the last week of the month.

• Oscillators are showing in oversold and Nifty near its channel bottom.  RSI low during April was 49.96 and present RSI reading is 51.03.  During April, Nifty low at 9075.15 and present low is 9565.3.  In this case RSI fall is more than Nifty fall.  Thus it is a bullish divergence.

Nifty now is in a crucial Juncture for further upmove :.

• Nifty should close above 20 day moving average. 

• As two is the maximum number of weekly bearish candle, coming week is very crucial for upside reversal.  Nifty should protect previous week low (9565.3) and retrace the previous two week candles in fast.

Options data for June series indicate highest Call Open Interest is at the strike of 9700 and highest Put build-up is at 9500.

FIIS/DIIS Data:

FIIS were net buyers in Indian Market and DIIS also were net buyers. 

Global Indices:

Global Indices  ended the week on a Dull note.