Nifty Weekly Analysis for the week ending 09 February 2018

Sensex opened the week at 34719, made a high of 34874, low of 33483 and closed the week at 34006 (-3.03%). Thus it closed the week with a loss of 1061 points. At the same time the Nifty opened the week at 10604, made a high of 10703, low of 10276 and closed the week at 10455. Thus the Nifty closed the week with a loss of 306 points (-2.84%).

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

1. On the weekly charts, both the indices opened with a Gap down and have formed a big black body candle which is in line with previous week bearish engulfing pattern. Weekly Open with a gap down is a bearish pattern which occurred earlier in August 2015.
2. This is the second negative week after 8 positive weekly closing.  Indices made maximum 3 consecutive bearish weeks since December 2016.
3. Weekly charts are suggesting strong bearishness in the near term. 
4. I have mentioned in my post dated 19^th January, Point no.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 gains.   Considering the same situation Nifty can make a correction up to 10300-400 level.”.   Market already made the said level of correction.
5. On daily chart Nifty showing some pull back.  On Tuesday Nifty arrested its fall at 10276 and on remaining days Tuesday’s low protected.   By doing this bounce back Nifty reentered in bullish trendline connecting 28 Sep 2017, 6^th December 2017 & 18 December 2017. So considering the bounce back from this level, market is range bond to mildly positive till 10700-10800 level.  So protecting low and conquering 10700-10800 level would be big task for bulls for coming days and failure to do this could result another round of selloff targeting 10000 level which is coincide with 200 dma..
6. Time wise Indices took 39 days from 6^th December to achieve 1139 points.  This is the highest bullish swing move till December 2016. In 6 days from 29 Jan, Nifty made a fall of 896  point which is 79% retracement from 1033 to 11171. 
7. Open Interest PCR has dropped and is at a low of 0.87, which indicates strong bearishness. Options data for February series indicate highest Call Open Interest is now at the strike of 11100 whereas the highest Put build-up has shifted lower at the strike of 10000. Thus Options data suggests a wide trading range with resistance at 11100 & support at 10000.
8. Volatility has shot up this week and closed at 19.23 which is above previous year high. 
9. As Index fall too sharp, most of the oscillators went into oversold territory; to cool them off, index has to either go sideways or bounce up
10. Global financial markets: Global stock markets ended the week on a negative note. 
11. FIIS become net sellers this week.