Nifty Weekly Analysis for the week ending 06 October 2017

Sensex opened the week at 31537, made a high of 31844, low of 31440 and closed the week at 31814. Thus it closed the week with a gain of 530 points (1.67%). At the same time the Nifty opened the week at 9893, made a high of 9989, low of 9831 and closed the week at 9979. Thus the Nifty closed the week with a gain of 191 points (1.91%).  Markets register their first weekly gain in the past three weeks. 

1. Last week we have discussed “…..For the coming week, protecting Thursdays low and close above 50 day moving average is crucial for bulls to achieve the momentum…”.   Nifty protected Thursday’s low and retraced 61% of entire fall.
         
2. Same as last week Let us compare July-August Rally & its retracement with  August-September rally and its retracement and its pull back in October.  After Sensex hit all-time high of 32686.5, it made a fall of 1558.5 points in 7 days.  Sensex gained a 809 points in 3 days time.  On the current retracement Sensex took 5 days and could achieve only 762 points.  At the same time Nifty gained 263 points in 5 days time in earlier retracement and in present retracement Nifty achieved 301 points.  So when Sensex performed almost same as last time Nifty outperformed Sensex.  Bank Nifty move up also slower compared to last retracement.  So Inter-market divergence is still exists.
3. Sensex made a weekly bullish harami candle.  Nifty has shown more strength than Sensex; broke previous week high of 9960 and made a bullish weekly candle.  Bank Nifty made a weekly bullish harami cross candle.
4. On Daily chart, Both Sensex and Nifty made 5 consecutive higher high, higher low daily candle pattern which is not happened during previous retracement, is signalling bullishness of the market.
5. Nifty closed well above all important moving averages.   Sensex should follow the same for confirmation.
6. Market should close above  Friday’s high and surpassing 66% retracement level is important for market for further upmove.
7. Global financial markets : The US markets were up 1.8% for the week. European markets ended the week in the green. Most of the Asian Market ended on positive note.
8. On Weekly basis,  FII were sellers in the cash segment
9. Options data for October series indicate highest Call Open Interest is at the strike of 10000 whereas the highest Put build-up has shifted higher at 9800. Thus Options data suggests a trading range with resistance coming at 10000 & support at 9800.  There is a huge addition of Put Open Interest is at the strike of 9900 indicate more bullishness of the Market.