Nifty Weekly Analysis for the week ending 10 November 2017

Sensex opened the week at 33710, made a high of 33866, low of 33108 and closed the week at 33315. Thus it closed the week with a loss of 371 points (-1.1%). At the same time the Nifty opened the week at 10432, made a high of 10490, low of 10254 and closed the week at 10322. Thus the Nifty closed the week with a loss of 131 points (-1.25%).

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

1. Last week we discussed “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”.   Both Indices broke Friday’s low on Tuesday and made a  Bearish Engulfing pattern, which accelerated further  downfall.   Bullish Gap between Sensex 32804-32670 and 10240-10237 for the Nifty, to act as an immediate Support. 
2. Nifty corrected 237 points and Sensex corrected 758 points in 4 days.   In previous Correction from 19 Sept. to 28 September, Nifty corrected 491 points and Sensex corrected 1442 points in 7 days.   Correction in August also took 452 point fall in Nifty and 1558 point in Sensex in 7 days .   So if it take same magnitude of previous correction Nifty may move down up to 10000 level  and Sensex may correct up to 32300-32400 level.
3. To gain bullish momentum, Indices  should protect Friday’s low and should close above 10 day moving average. .  
4. On Weekly Chart, both Sensex and Nifty made bearish candle comprising a lower low weekly candles after two consecutive bullish candles.
5. Still the primary trend is bullish and we maintain our Double Bottom target of 10600 level.  Close below 9831 validate bearish possibilities. 
6. Looking at the Bank Nifty chart, which is showing strength compared to Nifty and Sensex.  On Thursday, Bank Nifty arrested its fall and made a doji candle.  On Friday, Bank Nifty made a bullish higher high higher low candle.  On weekly chart, bank nifty made a doji type candle and protected previous week low.   PSU Bank Index made a flag pattern and on Friday it made bullish breakout.  But volume is not much convincing.
7. Previous week we have discussed about the negative divergence on RSI weekly and overbought situation on daily chart.  This time Type 2 Divergence is visible Oscillators.     
8. After reaching Nifty P/E level at 26.87 on 3rd November price corrected 237 points in Nifty and P/E level came down to 26.31 on Thursday.  Still the valuation is at high end.  .  All-time high of Nifty P/E is 28.47 in 2000.
9. Global financial markets: Global financial markets ended the week on a mixed note, with Asian markets continuing their gains, while the US and European share markets snapped their winning streaks.
10. On Weekly basis, FII were sellers in the cash segment. 
11. Options data for November series indicate highest Call Open Interest is at the strike of 10500 whereas the highest Put build-up is at 10200. Thus Options data suggests a trading range with resistance coming at 10500 & support at 10200.