SWINGTraderIndia - Weekly Big Picture May 22 2021

Posted Date: May 22 2021
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In our last weekly report, we had mentioned, “the index is trading in a sideways trend in the range of 14,200–14,900. And a breakout on either side may lead the index in the same direction. Our bias may turn positive above the 14,900 mark.” Last week, Nifty50 gained 3.39%, and Bank Nifty gained 7.58%.
 

 
The index opened on a positive note last week and formed a bullish candle, with a higher-high and higher-low price structure. The index closed at an all-time high on a weekly closing basis and formed a “Bullish Marubozu” candle on the weekly chart. The momentum indicator RSI on the weekly chart has now turned into an upward slope and formed a “W” pattern on the weekly RSI. However, weekly MACD is still trending below its negative crossover.
 
Likewise, analysis of the last three months’ daily timeframe chart indicates that the index has given a breakout above the trendline connecting the recent high points (red color trendline on the chart above) after almost three months of a downtrend. Following last week’s move, the index is trending above all key moving averages with a positive bias. Apart from the price action and moving averages, technical indicators RSI has also given a breakout along with a positive crossover on MACD and DMI.
On the options data front, PCR for monthly contracts expiring May 27 stands at 1.23. From the OI data perspective, for monthly contracts expiring May 27, maximum Call OI built up was seen for 15,500 strike price, followed by 16,000 strike price, which piled up to 58.71 lakh contracts and 43.21 lakh contracts, respectively. Likewise, maximum Put OI built up was seen for 14,000 strike price, followed by 15,000 strike price, which piled up to 66.06 lakh contracts and 61.17 lakh contracts, respectively. Further, strike specific option data suggests that Nifty might face strong resistance at 15,300 levels, followed by 15,400. On the downside, it might take support near 14,900 levels, followed by 14,800. Further, as per O’Neil Methodology of market direction, the current market is in a “Confirmed Uptrend” with three distribution days in the last 25 trading sessions.
 
Summary
 
All the above-mentioned technical parameters, along with derivative data and O’Neil Methodology of market direction, indicate a bullish trend in the coming days. From now onward, our bias would remain positive. Though the index may face some hurdle around 15,300–15,400, and trade above this level may turn the index more bullish in the coming days and weeks. From the coming week’s point of view, we expect the index to retest the previous all-time high in the next few days.
Further, we expect the current ongoing rally in Nifty50 to lead it toward 15,900–16,200 levels in the next few weeks and month(s). Apart from Nifty50, Bank Nifty is now showing positive strength. Hence, we expect this sector may lead the currently ongoing rally, and it may retest 36,000–36,500 levels in the next few weeks.
 
Apart from Nifty50 and Bank Nifty, there are few spaces and stocks that are doing really well. Sectors like fertilizer, public sector enterprises, and FMCG look attractive.
 
FII/ DII Activity for the Last Six Months
 

 
Current Status of Major Sectoral Indices - Per O’Neil Methodology
 

 
Current Status of Major Global Indices - Per O’Neil Methodology
 

 
SWINGTrader India performance chart
 
  
 
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SWINGTraderIndia - Nifty PSU Bank Index Analysis
SWINGTraderIndia - Nifty Next 50 Analysis
SwingTrader India Monthly Big Picture - May 6th 2021

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