Sunday, 19 April 2020

NIFTY SPOT AND BANKNIFTY WEEKLY AND MONTHLY VIEW : 19 APRIL 2020

Nifty View (CMP 9266):



-> Last Week’s price action saw a continuation of the previous week’s rebound in Nifty from oversold zone to 9320, a move of 20-23% from the lows of 7511. With this move, Index has again managed to claw back above & close above 100 SMA on Monthly Charts (100 SMA Monthly at 8600). Also, the First signs of outperformance of Bank Nifty compared to Nifty have been witnessed in the past 2 weeks and this has significant considering the fact that there is a significant 38-40% weight of Financials in Nifty. Hence for the rebound rally to gain further strength, this outperformance needs to continue with strong advances to decline ratio and overall improved market breadth.

-> This move from 7500 to 9300 was primarily on account of 3 reasons – Rebound in Global Markets, Oversold Technical Indicators in Nifty & other broad indices & expectations of Relief Package from the Finance Minister. Out of these 3, oversold conditions in Nifty have now been neutralized with Weekly RSI approaching 34-35 zone from 16 levels and secondly, Dow Jones is approaching an important resistance zone at 24700-24900. The third one remaining is the relief package it needs to be seen if something extra-ordinary measures are announced for individuals and corporates to cope up with the almost standstill situations currently would lead to an extension in the rally. Also, partial re-opening (Lockdown Relaxation) of the economy from 20th April will be an important trigger going forward.

-> The most important trend determinant would be how and when the Corona Virus peaks out or flattening of the curve for the number of cases is witnessed.

-> With the Underlying short-term trend having turned positive, Till Nifty Spot holds 8950, this rally can extend up to 9480-9530 which is 38.2% Fibonacci Retracement of the entire fall from 12430 (Jan 2020) & 7511 (Mar 2020).
Only on a cross-over above 9530, this rebound rally will have further strength up to 9760-9850.

A breach below 8950 will lead to selling pressure re-emerging leading to a retest of 8750-8580 zone.

Overall, For the next week, the Nifty Range could be 8800 – 9550.
Technically, Key Oscillators RSI, Stochastic & MACD are above their respective averages on the Daily, however below on the Weekly Charts leading to selling pressure at rises around 9530-9550.




BANKNIFTY VIEW (CMP 20680):



-> With the rebound in the last 2 weeks, Index has rebounded above 23.6% of the entire fall from 32613 (Jan 2020) & 16116 (Mar 2020) & has closed above it. Going Forward, 19800-20000 is important to support & Till 19800 holds, Index can witness a continuation of this current rebound move up to 21500-21700.

-> Broadly, On the Longer Term Chart, With Index still sustaining below 21650 which was a multi-year rising trend-line support zone formed by joining the lows of 8366 (Aug 2013) & 13407 (Feb 2016). The More time duration Index sustains below 21650-21700, higher are the probabilities of it witnessing resistance at higher levels & hence need to be a bit cautious around those levels. Currently, on the downside, the Next Support is at 19850-19800 & ONLY Below 19800, Index will witness a fall up to 19100-18800.

-> Cross over above Resistance zone above 21700 will lead to further Short-Covering up to 22400-22800.

Overall, For the next week, the Bank Nifty Range could be 19800 - 21750.

Technically, Key Oscillators RSI, Stochastic & MACD are above their respective averages on the Daily, however below on the Weekly Charts leading to selling pressure at rises around 21700-21750.

Tracking the Derivatives Data,

BANKNIFTY witnessed Longs OI add 5% with W-o-W closing positive by 5% CE writers building positions at 21000 total OI 1.58 Lakh Shares, on PE side 19500 PE OI 1.67 Lakh Shares implying support 19200 and resistance at 21300.

BANKNIFTY PE writers shifting base up at 19000-19500, and 20000 PCR_OI above 1 implies 19800 support if held we will test 21300-21800.

CE writers forced to unwind and shift north in heavyweights like AXISBANK from 400 to 500, ICICIBAK 350 to 400, HDFCBANK from 900 to 1000 CE, INDUSIND BANK from 400 to 500, L&TFIN. From 60 to 70

About

Parag Patil is a technical analyst and trading system designer with stock excel programmer. I hope the articles and live chart of nse future and mcx on this Website will be as helpful and profitable to you . I try to update and post new articles tips everyday. My motto is to encourage the traders, so that they should able to understand the technique views behind the moment of stocks. I have deeply analyzed with many technical indicator with parameter and added to my amibroker afl. And even taken backtest report which is never being implemented. Any of the analyst expect me. Seeing all this you may understand that my views is more technical than commercial. If you are profited by my views I fill happy.

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