Nifty Weekly Analysis for the week ending 03 November 2017

On the monthly chart, Sensex opened the month at 31538, made a high of 33340, low of 31440 and closed the month at 33213 with a gain of 1929 points (5.81 %).  At the same time the Nifty opened the month at 9893, made a high of 10384, low of 9831 and closed the month at 10335. Thus the Nifty closed the month with a gain of 547 points 5.6%). 

Sensex opened the week at 33260, made a high of 33734, low of 33164 and closed the week at 33686. Thus it closed the week with a gain of 528 points (1.59%). At the same time the Nifty opened the week at 10354, made a high of 10462, low of 10324 and closed the week at 10452. Thus the Nifty closed the week with a gain of 129 points (1.25%).

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

1. On monthly chart, in August and September, Nifty and Sensex formed two consecutive monthly bearish candles since December 2016.   Sensex and Nifty negated these bearish possibilities by closing well above its high and made highest record closing of all time. .  The closure above previous two months signals the conclusion of secondary consolidation and continuation of primary uptrend. 
2. On monthly chart, Sensex made the highest monthly closing since March 2016.  At the same, Nifty made its highest monthly closing since July 2017.
3. On Weekly Chart, Nifty made 5 consecutive higher high weekly candles and two consecutive bullish candles. Both Indices closed the week at record high.
4. We have discussed about Double Bottom Breakout target in my previous posts.  So our target is 10600 level and support is shifted from 9687 to 9831.  So closing below 9831 validate bearish possibilities. 
5. Bank Nifty, Sensex Inter-Market bearish divergence was negated by breaking its all-time high. This gives more bullish direction to the market.  .   
6. Last week, both the indices made one more Bullish Gap between 33340-33294 for the Sensex and 10383-10367 for the Nifty. This is the second Bullish Gap in last two weeks. Besides acting as strong Support, this Gap can also be considered as a Measuring Gap. Thus as per Gap theory, the target falls at Sensex 34322 and 10627 for the Nifty
7. On daily chart, Nifty formed a hanging man candlestick pattern, which is a short term reversal pattern. and Sensex made a white body spinning top candle.  To confirm the weakness Market should close below Friday’s low. 
8. Weekly MACD made a positive cross-over.   
9. Nifty P/E level reached 26.87 on Friday.  All-time high of Nifty P/E is 28.47 in 2000.
10. Global financial markets: Global Markets ended the week on a positive note.  Japan index spiked above 22,000 levels for the first time since 1996.  Benchmark index in Germany and Britain touched record highs during the week.
11. On Weekly basis, FII were sellers in the cash segment. 
12. Options data for November series indicate highest Call Open Interest is at the strike of 10500 whereas the highest Put build-up is at 10000. Thus Options data suggests a trading range with resistance coming at 10500 & support at 10000. Compared to Put side Call side Option Open Interest is low, indicate more bullish outlook.