Nifty Weekly Analysis for the week ending 16 February 2018

Sensex opened the week at 34203, made a high of 34535, low of 33957 and closed the week at 34011. Thus it closed the week with a minor gain of 5 points (0.02%). At the same time the Nifty opened the week at 10518, made a high of 10618, low of 10434 and closed the week at 10452. Thus the Nifty closed the week with a minor loss of 3 points (-0.03%).

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

1. On the weekly charts, both the indices made an inside bar candle.   Inside bar candle is a consolidation pattern, which can be either breakout  in same direction or reversal.  For Nifty, closing above 10703 favours bulls and further upmove expected in that case.   If closed below 10276 bears will take in charge and fall  will accelerate. 
2. This is the third negative week after 8 positive weekly closing.  Indices made maximum 3 consecutive bearish weeks since December 2016.  So the data suggest coming week market should close positive.
3. On daily chart Indices made a bearish engulfing candle on Friday. 
4. In 6 days from 29 Jan, Nifty made a fall of 896  point which is 79% retracement from 1033 to 11171.  Now Nifty on a pull back from 10276 to 10638.  In 7 days time Nifty made a retracement of 40%.
5. Options data for February series indicate highest Call Open Interest is now at the strike of 10600 whereas the highest Put build-up is at the strike of 10500. Thus Options data suggests on this expiry market should take support of 10500 level and 10600 will act as a strong resistance. 
6. Volatility has shot up this week and closed at 19.23 which is above previous year high. Vix cooled of this week and closed at 16.38. 
7. Last week I have mentioned “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”.   Nifty moved up 362 points.  Weekly MACD sell triggered.  Weekly RSI, Stochastic are still in oversold territory. 
8. Global financial markets: Global stock markets ended the week on a positive note.  S&P500 registers biggest weekly gain in 5 years.
9. FIIS are net sellers this week.