Nifty Weekly Analysis for the week ending 08 December 2017

Sensex opened the week at 32968, made a high of 33285, low of 32565 and closed the week at 33250. Thus it closed the week with a gain of 417 points (1.27%). At the same time the Nifty opened the week at 10175, made a high of 10271, low of 10033 and closed the week at 10266. Thus the Nifty closed the week with a gain of 144 points (1.42%).

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

1. On the daily charts, both the indices have made 6 lower low, lower high candles and on Thursday protected previous day’s low and break above previous 3 days high.  With Thursday’s gain Index negated lower low, lower high formation and resumed its bull move. 
2. On the daily charts, both the indices have formed big Opening White Body Marubuzo on both Thursday and Friday which is signalling for a reversal.
3. Both Indices took support near 100 day ema.  Both Indices closed well above 50 day moving average and 10 day moving average on Friday.  
4. On the weekly charts both the indices have formed a bullish hammer candle  which indicates fresh buying at lower levels. Thus daily as well as weekly charts suggest a bullish bias in the near term.
5. It is early to conclude the correction is over.   Because Indices are trading below slopping down trending channel connecting 6^th November and 28^th November.  Also lower top lower bottom is formed on weekly chart.  So until made a breakout above down trending channel and made a higher top, higher bottom candle on weekly chart we can consider this as a relief rally only. 
6. Last week I have mentioned “On Monthly chart, Nifty made a bearish candle.  If Nifty breaks 10094, that will lead to lower high lower low pattern on monthly chart and  result in a change in short term trend according to Dow theory.  Nifty never made a lower low pattern on monthly chart since December 2016.”  Last month Indices made a bearish candle and in this month Indices formed lower top lower bottom pattern.  Nifty should break above previous month high to negate the correction is completely over.     
7. We have discussed in last week “On Daily Chart RSI in oversold region.  Also showing bullish type 2 divergence...  .  “.   Daily stochastic and RSI turned up from oversold region.
8. Global financial markets: Global market ended positive.
9. On Weekly basis, FII were sellers in the cash segment. 
10. Options data for December series indicate highest Call Open Interest is at the strike of 10500 whereas the highest Put build-up has further increased and continues at the strike of 10000. Thus Options data suggests a trading range with resistance at 10500 & support at 10000.  There is highest open interest addition at put option strike 10200 and unwinding of call option interest is seen which indicate bullishness of the market.