Market likely to attempt to move further ahead. Banknifty may outperform this week.
Daily Time frame Analysis
- On Friday Nifty 50 the benchmark Index closed at 16529.10 (+164.70) (+1.01%).
- The trading range was relatively narrow as the NIFTY consolidated fiercely in the first half of the trading week. It eventually resumed its up move and extended its gains marking an All-time high.
- The markets closed with NIFTY posting net gains of 290.90 points (+1.79%) weekly basis. Forming a strong Bullish Candle at the previous session the move likely is to continue ahead.
- Markets are taking comfort from the upbeat global markets and supportive domestic cues amid the fear of a third Covid wave. However, we are now seeing restricted participation and expect the same trend to continue, at least in the near future.
- The 50DMA and Super trend (10,2) suggests a good momentum and will be focused while the nifty tries to retreat – Mean Reversion occurrence ahead.
- The weekly RSI stood at 72.11, it marked a new 14-period high which is a bullish indication. The Daily RSI is mildly overbought so an immediate sharp continuation will force the short term trader to book profit, subsequently the market will find a support with a bullish intent to continue.
- In last week mentioned about the 1.272 (16440) Fibonacci extension level as the target. Now the 1.414 level that falls around 16700 levels will be the resistance for the coming week with a strong support zone 16150-16290.
- An analysis of Relative Rotation Graphs (RRG) showed Nifty Realty and IT Indices are the two most dominant groups in the leading. Bank Nifty and Nifty Infrastructure Index are inside the lagging quadrant.
- FIIs have net bought Rs 879.2 crore and DIIs bought Rs 636.38 crore worth of equity shares last week.
- Option data indicated that the Nifty50 could see a broader trading range of 16,300 to 17,000 levels while an immediate trading range may be 16,300 to 16,800 levels in coming sessions.
Maximum Put open interest was seen at 16400 followed by 16300 & 16500 strikes while maximum Call open interest was seen at 16800 followed by 17000 & 16500 strikes. Aggressive Call writing was seen at 16800 and 17000 strikes while Put writing was seen at 16400 & 16500 strikes.
Hourly Time frame Analysis
- The Nifty in the hourly took support near (16170 levels) after moving out of the consolidation range in the first half of the week and closing near the ATH.
- A strong Bullish candle formed in daily charts of Nifty indicating a strong bullish move to continue in further sessions and no significant selling candle was seen in hourly charts on intraday basis which shows the buyer’s dominance till end of the day session.
- Analysing Nifty future Open Interest Data 5% additional contracts were added indicating Strong Long Build up.
- Understanding Ichimoku Cloud, Lagging Span remains above the current price which is likely to stay at upper levels and take support near the prior prices. If the hourly lagging span moves in between the prior prices and the cloud formed will lead to a further indecisive daily session.
- Leading Span A&B suggests that Nifty may consolidate at higher levels with positive bias as the cloud formed is bigger in size and upward climbing.
- Hourly RSI at 75.21 currently at overbought zone indicating trend may take a halt for a while. Any dip and rise from the levels of 40-50 will be an indication of trend support.
- Any closing below 16150 will be a trend reversal indication for positional traders and exhaustion of the short term investor too.
- Volatility increased as INDIA VIX rose FROM 12.60 to12.99(+3.03%) levels weekly basis.
IMPORTANT LEVELS TO WATCH FOR INTRADAY AND SWING TRADING
16120 – 16240 – 16390 – 16480 – 16565- 16700
ALGO-ROBO TRADING PLATFORM
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