Nifty Weekly Analysis for the week ending 29 September 2017

On the monthly chart, Sensex opened the month at 31769, made a high of 32524, low of 31082 and closed the month at  31284 with a loss of 447 points (1.43 %).  Sensex formed first lower high, lower low formation in the monthly chart since December 2016.  At the same time the Nifty opened the month at 9938, made a high of 10179, low of 9687 and closed the month at 9789. Thus the Nifty closed the month with a loss of 129 points (-1.3%).  Nifty formed two consecutive monthly bearish candle since December 2016.

Sensex opened the week at 31986, made a high of 32016, low of 31081 and closed the week at 31283. Thus it closed the week with a loss of 639 points(2.04%). At the same time the Nifty opened the week at 9960, made a high of 9960, low of 9687 and closed the week at 9789. Thus the Nifty closed the week with a loss of 176 points (-1.80%).

1. Last week we have discussed bearish probabilities   “…..Sensex failed to reach previous month high of 32686.5. Same divergence was visible in Bank Nifty also…  Nifty made a weekly engulfing bearish candle and Sensex made dark cloud cover pattern.   For the confirmation  Nifty / Sensex should close below Friday’s low of 9952.8 / 31886.09 levels.  Target 9850-9900 level…”. 
2. Nifty broke 9953 level in the first day of the week itself and achieved the target of 9850-9900 level in the same day.   On the same day itself, Nifty closed below 50 day moving average which confirmed more bearishness ahead.     On Thursday, Nifty made a low of 9687.55 just above August low of 9685.55, but managed to close above opening price.  On Friday, Index managed to protect Thursday’s low and broke previous day’s high as well.  Market reacted from oversold level.  This is the first time after 7 consecutive lower high, Nifty is able to break previous day’s high.   
3. Let us compare July-August Rally & its retracement with  August-September rally and its retracement.  In July-August rally Nifty rose 689 points in 23 days  which is the biggest rallying segment in this uptrend from December 2016.  The rally is retraced 66% (452 point fall) in 7 days.  In August-September rally Nifty rose 493 points in 25 days.  The rally retraced fully (491 point fall) in 7 days.  There are similarities in falls of both rallies.  In both rally it took 7 days and fall around 452-491 points).  So if Thursdays low of 9788 is protected then the damage is limited and market move in a sideways move to bullish move.   Sustainability of reversal depends on how fast retracement should took.  Last time the retracement was too slow, then market not able to break previous high, made a double top and retraced fully. 
4. Nifty / Sensex made a double bottom on Thursday.   If Sensex close above 32686 level, then Nifty target for Double Bottom is 10600 level. Else If it close below 9685 level the downside target is 9200 level. 
5. Weakness is visible in daily, weekly & monthly time frames.   Sensex formed first lower high, lower low formation in the monthly chart since December 2016.  Nifty formed two consecutive monthly bearish candles since December 2016.
6. For the coming week, protecting Thursdays low and close above 50 day moving average is crucial for bulls to achieve the momentum. 
7. MACD is made a negative crossover And MACD line turned below 0 line.  RSI & Stochastics are in oversold region.
8. Global financial markets : US markets ended the week marginally higher by 0.1%.  European stocks were mixed.  Except for Japan, Asian markets were trading in the negative territory.
9. On Monthly & Weekly basis,  FII were sellers in the cash segment.
10. Options data for October series indicate highest Call Open Interest has shifted lower at the strike of 10000 whereas the highest Put build-up is at 9700. Thus Options data suggests a trading range with resistance coming at 10000 & support at 9700

Nifty Weekly Analysis for the week ending 22 September 2017

Global financial markets : Europe/ US markets closed higher.  Asian markets closed lower.

Weekly basis,  FII were sellers in the cash segment

Options data for September series indicate highest Call Open Interest is at the strike of 10200 whereas the highest Put build-up is at 9900.   There are huge open interest addition at the strike of 10000 call, 10050 call, 10100 call and 10200 call.   At the same time  there are huge unwinding of Open Interest at the strike 10100 put, 10000 put and 9900 put which indicate bearishness of the market.  

Nifty opened the week at 10133, made a high of 10179, low of 9953 and closed the week at 9964. Nifty closed the week with a loss of 121 points (-1.56%).After 3 consecutive higher low weekly candles, Nifty made weekly bearish engulfing candle.   On Sensex a weekly dark cloud cover pattern is formed.   Both are bearish pattern.

On the daily charts, on Friday, both the indices have formed a big Opening Black body Marubuzo candle.  Nifty and Sensex made 3 consecutive lower high candle on daily chart.  Nifty made maximum 4 consecutive lower high candle in this uptrend from Dec 2016.

Last week I have argued that  “Sensex all-time high is 32686.48 which is little away from current price.  Also Sensex is trading below its 80% retracement levels.   Sensex should close above 32396 for further upmove.  Nifty should close above 10138 level within 10 days time frame for further upmove.  For Nifty Important resistance level is 10138 - 10200 level.   Option data also suggest 10200 level as an immediate resistance.  If Nifty closed above that next target would be around 10350-10400 level.  .…..”
  Nifty not able to move above the resistance zone of 10138-10200 level.   Sensex failed to reach previous month high of 32686.5. Same divergence was visible in Bank Nifty also.  This is negative indication for market ahead.  For any bullish possibility Sensex should close above previous month high of 32686.5.

Nifty made a weekly engulfing bearish candle and Sensex made dark cloud cover pattern.   For the confirmation  Nifty / Sensex should close below Friday’s low of 9952.8 / 31886.09 levels.  Target 9850-9900 level

Nifty / Sensex made a double top formation.  If Sensex close above previous month high  double top formation invalidate.   For the confirmation of Double Top, Nifty should close below 11 August low of 9685.55.   Target for Double Top formation is 9200 level which is 40% of entire upmove from Dec 2016.

Sensex high all time high of 32686 on the week ending 4th August.  In one week Sensex .  Sensex made a fall of 1558.5 point in one week.  Now it took 5 weeks for retracement and not able to close above 32686 level which indicate weakness of the market.

Structurally Nifty and Sensex near Trendline support level.   If Nifty close below Friday’s low 9952.8 then on daily chart, a short trendline connecting low of 9685.55, 9740, 9783.75 is broken.  But the trendline connecting from April,  June & August are coinciding with 50 day moving average.

For Nifty, 50 day moving average stands at 9918 – 9954 level which was crucial in previous down move in protecting Nifty upmove.

Sensex is making a contracting triangle connecting from the high of 32686 to 32524 on upper channel and a low of 31128, 31360. So holding Friday’s low  is crucial for bulls.

MACD is now making attempt to show negative crossover signal (MACD line is turning below its signal line, without crossover).  Also observed negative divergence on both weekly and daily time frames in Nifty / Sensex RSI / Stochastics and MACD.   This indicate market may be running of steam.

FIIs are continuous sellers.

Nifty P/E level reached 26.42 on Monday for the first time in this trend from Dec 2016 onwards.  All time high of Nifty P/E is 28.47 in 2000.

Nifty Weekly Analysis for the week ending 15 September 2017

Key events during the week:

• Terrorist attack in London
• North Korea fired another ballistic missile over Japan
• Inflation data released by the RBI.

Global financial markets are closed in a positive note.   Benchmark Indices in US made a good gain.   The Dow Jones Industrial Average posted its biggest weekly gain of 2017.   Most Asian Markets closed mixed.  . Benchmark index in Japan surged by over 3.3% despite aggression from North Korea

Weekly basis,  FII were buyers in the cash segment

Options data for September series indicate highest Call Open Interest has shifted upwards at the strike of 10200 whereas the highest Put build-up is now at 9900. Thus Options data suggests a bullish move. 

Nifty opened the week at 9971, made a high of 10132, low of 9969 and closed the week at 10085. Nifty closed the week with a gain of 151 points (1.49%).  Nifty made 3 consecutive higher low weekly candles.

On daily chart, On Wednesday, Nifty made a high of 10132but failed to hold the gain.   On Thursday, Nifty is not able to break Wednesday’s high.  On Friday, Nifty made a gap down opening of 24 points and broke previous two days low.  Nifty recovered from earlier lose and managed to close above the open price.

Last week we discussed “For Nifty staying above 9784 is crucial for further upmove.  Once Nifty break Friday’s high 9983.45, next strong resistance comes around 10,046 – 10088 level.…..”
Nifty broke crucial resistance of 9784 on First day of the week itself.

Nifty s trading near its all time high of 10137.85, well above 66%/80% retracement level.  Nifty made a 446 point retracement (99%) in 5 week  against 452 fall in 1 week.   Sensex all-time high is 32686.48 which is little away from current price.  Also Sensex is trading below its 80% retracement levels.   Sensex should close above 32396 for further upmove.  Nifty should close above 10138 level within 10 days time frame for further upmove.  For Nifty Important resistance level is 10138 - 10200 level.   Option data also suggest 10200 level as an immediate resistance.  If Nifty closed above that next target would be around 10350-10400 level. 




Upcomng events:

• Federal Reserve's meeting on September 19-20

Nifty Weekly Analysis for the week ending 08 September 2017

Key events during the week:

• Geo-political tensions escalated during the week

• Global financial markets are closed in negative note.  Benchmark indices in Japan and Singapore fell by 2.2% and 1.5% during the week

• Weekly basis,  FII were sellers in the cash segment

Options data for September series indicate highest Call Open Interest remains at the strike of 10000 whereas the highest Put build-up is at 9700. Thus Options data suggests a trading range with resistance coming at 10000 & support at 9700.


Nifty opened the week at 9984, made a high of 9988, low of 9861 and closed the week at 9934. Thus the Nifty closed the week with a loss of 40 points (-0.40%0. Sensex and Nifty closed the week in the negative zone after three consecutive weeks of gains.

On daily chart, Nifty traded in a narrow range and managed to close above 10d ema.

On weekly chart, both Nifty and Sensex made a black body candle with longer shadow on bottom.  Nifty broke the previous week high, but sensex is  not able to break previous week high.  Bearish patterns are more visible on Sensex.  On Sensex, weekly  open and high is same.

I have argued in last week,  “…….Looking at the present scenario, Now Nifty stands at important retracement resistance level of 66%. It took 3 weeks time to retrace 66% retracement against one week fall.  In a strong bull market should retracement in faster time.     Nifty to close well above this level for further upmove.  

Interestingly when Nifty broke the important resistance of 9948, Sensex not able to break the resistance of 31937.51.  Sensex should close above31937.51 for further upmove.

While Nifty retraced above 61.8% level Sensex retraced only 50%level.  Sensex need to move above 66% level for further upmove. 

For Nifty staying above 9784 is crucial for further upmove.  Once Nifty break Friday’s high 9983.45, next strong resistance comes around 10,046 – 10088 level.…..”

Nifty and Sensex failed to sustain above the critical reversal level mentioned above.  Nifty in a range of 9685.55 to 9988.40 and Sensex in the range 31,128.02 to 31944.10.  So the level mentioned in the last week is still valid : On upside Nifty should close above 9988..4 and on down side move Nifty should close below 9685.55.

Aurobindo Pharma - Update 1

Refer to the below post dated 27th August.   Auropharma now running on a profit of 7240 rupees.  Wait to reach 10,000 rupees to book partial profit.  

Sunday, 27 August 2017

Aurobindo Pharma - Bullish breakout

After a 4 week correction, the stock has made a bullish break out above the prevailing trend line.

Buy 740 Call at 27.5 Rupees.
Sell 800  Call at 9.4 Rupees

Maximum risk : 14,480
Maximum Profit potential : 33,520.
Risk Reward Ratio : 1:2

Nifty Weekly Analysis for the week ending 01 September 2017

Key events during the week:
Economic data that was released on Thursday showed that India’s GDP has dipped to 5.7 percent, y/y, in Q1 FY2018

• Global financial markets are closed in positive note.  

• Weekly basis,  FII were buyers in the cash segment

• Options data for September series indicate highest Call Open Interest remains at the strike of 10000 whereas the highest Put build-up is at 9700. Thus Options data suggests a trading range with resistance coming at 10000 & support at 9700.

• August was a high volatile month compared to previous three months.  Vix peaked to 15.54. Then cooled off sharply and closed at  11.95. On weekly chart Vix closed at11.68.

• On daily chart, MACD made bullish cross over and Price RSI also look positive.

On the monthly chart, Nifty opened the month at 10101, made a high of 10137.85, low of 9685.55 and closed the week at  9917.9 with a loss of 159 points (1.6 %).  This is the highest monthly loss since December 2016.

Nifty opened the week at 9907.15, made a high of 9983.45, low of 9783.75 and closed the week at  9974.4 with a gain of 117.35 points (1.18%).   Nifty and Sensex made 3rd straight weekly gains.

On daily chart,  3rd consecutive bull candle which is first time since 2nd August 2017.  After made a low of 9685.55 on 11th August, Nity made a 58% retracement (262 points) and failed to move up further and made fall of 208 points which is almost 80% fall to 262 point upmove.  Market stared to make contracting after that which looks similar to a bearish flag. Market made another attempt to move up and made a high of 9926 on 28th August.  On expiry day of August Nifty made a hammer type candle and closed above contracting triangle.  On Friday Nifty broke important resistance of 9948 and closed well above it.

I have mentioned in my post dated 13th August,  “…….Market closed near 9700 level which is a strong support for Nifty .    In the upmove 9700 acted as a strong resistance during June 2017.  On 6th June Nifty made an ELB candle by touching high of 9709.3.  On 22 June Nifty made another attempt and failed to move above June 6 ELB candle.  On 10th July Nifty made a hammer type candle and well closed above 9700 level.   As a rule strong resistance become strong support.   At the same time, 61.8%-66% retracement of July – August Rally is placed around 9700 level…..   Among oscillators, RSI, stochastic & KST are currently poised in oversold territory in daily chart…..”

Looking at the present scenario, Now Nifty stands at important retracement resistance level of 66%. It took 3 weeks time to retrace 66% retracement against one week fall.  In a strong bull market should retracement in faster time.     Nifty to close well above this level for further upmove.

Interestingly when Nifty broke the important resistance of 9948, Sensex not able to break the resistance of 31937.51.  Sensex should close above31937.51 for further upmove.

While Nifty retraced above 61.8% level Sensex retraced only 50%level.  Sensex need to move above 66% level for further upmove.

For Nifty staying above 9784 is crucial for further upmove.  Once Nifty break Friday’s high 9983.45, next strong resistance comes around 10,046 – 10088 level.