Nifty Weekly Analysis for the week ending 25 January 2018

Sensex opened the week at 35614, made a high of 36268, low of 35545 and closed the week at 36050. Thus it closed the week with a gain of 539 points (1.52%). At the same time the Nifty opened the week at 10883, made a high of 11110, low of 10881 and closed the week at 11070. Thus the Nifty closed the week with a gain of 175 points (1.61%).Nifty made an all time high of11110 at the same time Sensex made an all-time high of 36268.

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

1. Indian share markets finished in red snapping a six-day record-setting rally on last session of January expiry in the derivatives segment.  Sensex has formed a small black body with a longer lower shadow, whereas Nifty has formed a pattern almost like Hanging Man.   So protecting Friday’s low is important fo bulls for further upmove.  
2. On the weekly charts, both the indices have formed Opening White body Marubuzo which is confirming existing bull trend.
3. Market continued its rally for eight straight week, conquering new milestones as Sensex made a new record highs of 36,050.54, while Nifty closed at all-time historic high at 11,069.65. 
4. Time wise Indices took 36 days from 6^th December to achieve 1077 points.  This is the highest bullish swing move till December 2016.
5. Important economic event of Union Budget 2018 is scheduled by next week (1st Feb) which is expected to add volatility in Indian Benchmark.
6. Nifty P/E level reached 27.81 on Tuesday.  All-time high of Nifty P/E is 28.47 in 2000.  Same time Sensex P/E ratio reached at 26.34 on Wednesday. All-time high of Sensex P/E is 29.39 in June 2000.    As I mentioned last week Investors and Traders should take a careful approach of trading. 
7. Options data for February series indicate highest Call Open Interest is at the strike of 11200 whereas the highest Put build-up is at the strike of 10500. There is a huge undwinding of Open Interest visible at put option strike 11100.  At the same time there is huge addition of OI seen at Call Option Strike 11100 and 11200.  These indicate bearish undertone of the Market.  
8. Bearish Divergence still persists in RSI. Daily stochastic and RSI in overbought zone. 
9. Global financial markets: Global stock markets ended the week on a positive note.  Stock markets in Asia were mixed
10. On Weekly basis, FII are Buyers in Cash Segment.  

Nifty Weekly Analysis for the week ending 19 January 2018

Sensex opened the week at 34687, made a high of 35542, low of 34687 and closed the week at 35512. Thus it closed the week with a gain of 919 points (2.66%). At the same time the Nifty opened the week at 10718, made a high of 10907, low of 10667 and closed the week at 10895. Thus the Nifty closed the week with a gain of 213 points  (2.00%).

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

1. Market continued its rally for seventh straight week, conquering new milestones as Sensex made a new record highs of 35,511.58, while Nifty closed at all-time historic high at 10,894.70.  Since 2012 it is first time Indices made seven straight gain.   Considering the same situation Nifty can make a correction up to 10300-400 level. 
2. Nifty P/E level reached 27.44 on Friday.  All-time high of Nifty P/E is 28.47 in 2000.  Same time Sensex P/E ratio reached at 26.06. All-time high of Sensex P/E is 29.39 in June 2000.  This ratio indicates that the benchmark index could well be in a bubble territory as of now. Sensex lost around 4000 points within a quick span of one month during the 2008 financial crisis. At that time, Sensex was trading at a P/E ratio of around 28.  So Investors and Traders should take a careful approach of trading. 
3. Midcap and Small Cap not participated in the current rally.  Also when Sensex made mere a 70 point drop on Thursday many midcaps burnt badly.  So There is a clear divergence is visible Sensex versus Midcap and Small Cap. 
4. Time wise Indices took 31 days from 6^th December to achieve 874 points.  In all previous upswings it took only 24-25 days maximum  and maximum 803 points, after that a correction of 400 point happened.  So considering this market is maturing for a correction. 
5. Bearish Divergence still persists in RSI. Daily stochastic and RSI in overbought zone.  
6. The above signals are not adequate for shorting the Market.   More signal required for that. 
7. On the daily charts, on Friday, both the indices have formed a real white body candle.  On the weekly charts, Sensex has formed a big Opening White body Marubuzo, whereas Nifty has formed a big white body candle. Thus daily as well as weekly candlestick pattern suggests a bullish bias in the near term.
8. There are two gaps are formed.  One is on this week, both the indices opened with an Upward Gap between Sensex 34687-34638 and Nifty 10713-10690. This gap is likely to act as Support in the near term. Similarly two weeks back, the indices had formed a bullish Gap between Sensex 34020-33995 and 10520-10513 on the Nifty..
9. Global financial markets: Global stock markets ended the week on a positive note
10. On Weekly basis, FII were buyers in the cash segment and DIIs were sellers.  Current bull market mainly driven by Domestic Institutional Investors.   Now DIIS are started booking profit and FIIS are started buying.  So there is a sharp corrections in DIIS invested stocks and bullish movement is visible in FIIS invested stocks like HDFC Bank, ICICI bank etc. 
11. Options data for January series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up has shifted higher at the strike of 10500. Thus Options data suggests a trading range with resistance at 11000 & support at 10500.  Open Interest additional visible at put strike of 10800 and 10900 which indicate bullish optimism of Traders.  Open Interest unwinding seen in call option 10900 and 11000.  

Nifty Weekly Analysis for the week ending 12 January 2018

Sensex opened the week at 34216, made a high of 34638, low of 34216 and closed the week at 34592. Thus it closed the week with a gain of 439 points (1.28%). At the same time the Nifty opened the week at 10591, made a high of 10690, low of 10589 and closed the week at 10681. Thus the Nifty closed the week with a gain of 122 points (1.16%).  This was the sixth weekly gain in a row for the benchmarks.

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

1. On the daily charts, Nifty has formed a Dragon-Fly Doji whereas Sensex has formed a long legged doji. This pattern neither indicate bearishness nor bullishness, but indecision.  This pattern can have bearish implications only if Nifty closed below Friday low. 
2. On the weekly charts, both Sensex and Nifty have formed a Bullish big White body Marubuzo. Thus weekly candlestick pattern suggests a bullish bias in the near term
3. Last week, the indices have left behind a bullish Gap between Sensex 34020-33995 and 10520-10513 on the Nifty. In the near term, this Gap will act as support.
4. Last week, we saw the index finding support from 10,500 level. The level which acted as a strong resistance on the way up will now act as a strong support for the index as per the change of polarity principle.
5. 10800 level may face stiff resistance as 24 month long trendline facing channel resistance. 
6. Time wise Indices took 26 days from 6^th December to achieve 657 points.  In all previous upswings it took only 24-25 days maximum after that a correction of 400 point happened.  So considering this market is maturing for a correction. 
7. Bearish Divergence still persist in RSI. 
8. Global financial markets: Global stock markets ended the week on a positive note
9. On Weekly basis, FII were sellers in the cash segment. 
10. Options data for January series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up has shifted higher at the strike of 10500. Thus Options data suggests a bullish bias with a support of 10400.           

Nifty Weekly Analysis for the week ending 05 January 2018

Sensex opened the week at 34059, made a high of 34189, low of 33703 and closed the week at 34154. Thus it closed the week with a gain of 97 points (0.28%). At the same time the Nifty opened the week at 10532, made a high of 10566, low of 10405 and closed the week at 10559. Thus the Nifty closed the week with a gain of 28 points (0.27%). Both Indices made highest closing in the first week of 2018.

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

1. On the daily charts, Sensex has formed a big Opening White body Marubuzo whereas Nifty has formed a Real White body candle which is formed after a gap up action.  Both Indices made a weekly close with record high.  Daily pattern indicate bullish possibilities. 
2. On the weekly charts, both the indices have formed a hanging man pattern.  So closing above hanging man high required to invalidate bearish possibilities. 
3. Indices retraced fully  its 21 days correction in 21 days.  Timewise Indices took same time of correction only and retraced more than 100% which is a bullish signal. 
4. Bearish Divergence still persist in RSI.  The weekly MACD is has shown a positive crossover..  
5. The Index maintained positive bias with higher high and higher low sequence and gained for 5^th consecutive week.  Last week we mentioned “Looking at the bull trend from 2016, maximum number of weekly bull candle is 5.  So probably there is a chance of correction in coming week or the week after coming week”
6.  Global financial markets: Global stock markets started the new year on a positive note
7. On Weekly basis, FII were buyers in the cash segment. 
8. Options data for January series indicate highest Call Open Interest is at the strike of 11000 whereas the highest Put build-up has shifted higher at the strike of 10400. Thus Options data suggests a bullish bias with a support of 10400. Also there is highest put option addition at 10500 PE.