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.