Daily Time frame Analysis
- On Friday Nifty 50 the benchmark Index-Nifty closed at 15683.35 (-8.05) (-0.05%).
- The Indian stock markets traded with a corrective intent for the third day in a row though it closed flat on the week’s last trading day leaves us in the dilemma for initiating fresh positions.
- On Friday, selloff intensified as the NIFTY went on to test the levels of 15450 by the middle of the day session, which was the confluence level mentioned in last week’s report. That is also the 1/3 retracement of the aggressive uptrend from 14may2021 till the recent high.
- From the technical perspective, the markets almost achieved a throwback as they tested the levels from where it originally broke out. So now the 15450 mark will be strong support for the following week. If this support is violated we will see a sharp selloff till 15200-15100 levels.
- A Hanging Man- Bearish reversal pattern occurred on the candlestick chart. The emergence of such a candle near the high point hints at the continued disruption of the present uptrend.
- Amid the monthly expiry we may witness huge volatility in the range (16200-15100). The crucial resistance for up move is 15850 and support is 15450 if the selling intensifies.
- The concerning factor is that the INDIA VIX declined once again by 3.21% (14.79), this scenario leaves us in conundrum with the volatility spike anytime.
- The Relative Strength Index (RSI) on the daily chart is 60.09; it has marked a fresh 14-period low which is bearish. RSI, however, is neutral and shows a moderate negative divergence against the price.
- Strong CALL WRITING was seen on the strike price CE15800, CE15700, whereas only the strike price of PE15500 witnessed PUT WRITING following to PE15000
- According to the future OI data of NIFTY & BANKNIFTY, more ROLLOVER contracts were seen in NIFTY compared to BANKNIFTY.
- FII derivative OI data shows that they have decreased their LONG POSITIONS from 82% to 78% and increased their SHORT POSITIONS to 22%.
Hourly Time frame Analysis
- The nifty hourly trend suggests that it took the support (15450), which was the level after that nifty faced a weak momentarily up move with choppiness as the buyers started some profit booking as we can see in theabove charts. (Marked with arrows). The Higher Highs (HH) formation is getting weak.
- Drawing the current trend’s trendline which is violated recently, we find an extreme resistance around 16200. The trends crucial supports are the prior Highs and retested levels as show above (15450 – 15130)
- In the hourly chart, according to Ichimoku cloud current price trades below the clouds which suggests the weakness of trend.
- The lagging span suggests a neutral view now as the indicator is between the prior price and cloud. If the lagging span breaks below the prior cloud we may consider it a short term reversal taking in confluence with price action making Lower Lows.
- RSI momentum indicator is hovering in the range of 30-70 which is a non-directional character of any trend, currently the RSI is at 50 which the centerline of the indicator- above or below this level a trend tends to gain its momentum.
- MACD is in the negative territory with a positive crossover of MACD line and Signal Line. Subdued Momentum may continue till both the indications align in same direction of the trend. A look at the histogram reveals lack of momentum in the market now