Nifty Weekly Analysis for the week ending 13 October 2017

Sensex opened the week at 31862, made a high of 32509, low of 31769 and closed the week at 32433. Thus it closed the week with a gain of 618 points (1.91%). At the same time the Nifty opened the week at 9988, made a high of 10192, low of 9956 and closed the week at an all-time  record high of  10167, surpassing its Sept. 18 record. Thus the Nifty closed the week with a gain of 188 points (1.85%).  Markets register their consecutive 2nd weekly gain. 

Last week we have discussed “…..Market should close above  Friday’s high and surpassing 66% retracement level is important for market for further upmove.”  Market closed above Friday’s high on 1st day of the week itself and on Thursday both Sensex and Nifty closed well above the 66% retracement level. 

Let us discuss few observations on last week Indian benchmark movements.

1. Against 7 days fall of 1442 points  Sensex retraced almost 100% (1426 points) in 10 days time.  At the same time Nifty retraced more than 100% and made a new high.
2. In August, retracement from 9685 to 10179 took 25 days.   But on the current retracement from 9688 to 10192 took only 10 days.  On weekly chart, 2 weeks fall fully retraced in 2 weeks time which indicate more bullishness of the market.
3. On daily chart, both Sensex and Nifty made higher high candle through out the rally which also indicate the strength of the market.
4. On daily chart MACD made a bullish cross-over, weekly also to do the same.
5. Inter-market divergence: When Nifty made a new all time high, Sensex not repeated the same thing.  Remember the fall and retracement of last time; Nifty fell 452 points in 7 days from 2nd Aug to 11th Aug and retraced the rally and made new high on 19th September.  But the same was not happened in the Sensex.  Nifty  lost all the gain and fell 491 points.   So to confirm the bullish breakout, Sensex also should close with new record high.  
6. If Sensex close above its record high expecting a medium term target of 33000 – 34000.  Same time Nifty target for medium term is 10300-10600 level.
7. Global financial markets : Global Markets ended the week on a 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 10200 whereas the highest Put build-up has shifted higher at 9900.  There is a huge addition of Put Open Interest is at the strike of 10100.  Shifting of put build-up & huge addition on 10100 put strike suggests more bullishness in the Market.