ANALYSIS OF NIFTY & BANK NIFTY FOR THE WEEK ENDING 03-12-21
This is a new weekly post/series where I will briefly capture the key highlights of the 2 leading indices. This post is supported by a video that talks more about the key stocks that form the indices. One of the reasons for starting this series is that there are many readers/viewers who are positional traders or investors and for them, weekly analysis of indices would be of more interest than a daily EOD analysis.
I hope that this effort would help the readers and viewers to get a crisp idea about what happened in the markets over a period of one week.
Important - Although the markets are very hard to predict in the short term, the main issue presently faced is that even on an intraday basis, the markets have been extremely volatile. This may impact the traders who trade on an intraday basis. If you are one such trader, please be careful and assign topmost priority to risk management.
BANK NIFTY
The comparison is done with 26-11 Numbers as this relates to last week’s closing.
EOD on 26-11-21 = 36025
EOD on 3-12-21 = 36197 up by 171 points or 0.48% from 26-11-21
The highest level in the week ending 3-12-21 = 36844 on 3-12-21
The lowest level in the week ending 3-12-21 = 35328 on 29-11-21
Difference Highest - Lowest = 1516 points or 4.30% from the lowest level
In the last one month - from 5-11, Bank Nifty has made a downward move of 3376 points or 8.53% which is quite a significant move.
NIFTY
The comparison is done with 26-11 Numbers as this relates to last week’s closing.
EOD on 26-11-21 = 17026
EOD on 3-12-21 = 17197 up by 170 points or 1.00% from 26-11-21
The highest level in the week ending 3-12-21 = 17489 on 3-12-21
The lowest level in the week ending 3-12-21 = 16782 on 29-11-21
Difference Highest - Lowest = 707 points or 4.21% from the lowest level
In the last one month - from 5-11, Nifty has made a downward move of 720 points or 4.02% which is a significant move.
FII - DII DATA:
NOV 2021
FIIs = -39,897 Crores
DIIs = 30,555 Crores
Net is negative = -9,342 Crores
DEC 2021
FIIs = -7,030 Crores
DIIs = +6,488 Crores
Net is negative = -542 Crores
Conclusion:
Here is an interesting observation that I made while writing this post:
On 01 Nov, Nifty ended at 17929 which is not far away from the 1st weekly close price of Nov 21 - 17916. From there, in a matter of 1 month, Nifty has fallen 720 points and the Net FII-DII number is -9884 Crores. So for every 13 Crores sell made by FII-DII,Nifty fell by 1 point.
Our indices tend to follow global cues when it is negative and ignore the positive global cues as at that time FII gets in to the act of selling despite the domestic cues not being negative at all.
The relentless selling on the part of FIIs is not going to let the indices breathe easy. I am thinking if the DIIs have enough funds at their disposal to counter FIIs planned selling efforts. If they do not have the money power, our market would keep drifting down with every 13 Crores sold.
BANK NIFTY -
Bank Nifty broke 200 DMA on 29 Nov and then bounced back up from there on a closing basis and thereafter has not been able to stay far away. Somehow, it is getting recalled by the Big Daddy of Moving Averages. This is not a good sign once the index has already bounced off from below the line.
36800 is the key resistance line for Bank Nifty and as long as it does not close above the line on the daily charts, the weakness is likely to continue as we have seen in the week that was just concluded that the sellers become active as soon as it nears any significant resistance level.
The RSI is also languishing below 40 indicating that the sideways moves may continue for some more time. Unless the RSI closes well above 40 on the daily charts, we may keep experiencing such moves.
On the weekly chart, the index is thoroughly confused as the candle formation is that of a thin Doji - indicating that neither bears nor the bulls know what needs to be done next. In one of my earlier posts I had mentioned that the indices need some mentoring help and that is what has been happening.
It has so far managed to end above the 50 Weekly Moving Average which is not very far from the swing lows of Bank Nifty.
The monthly chart of the indices shows a very dismal picture; the only solace is that the RSI is making its best efforts to cling on or around the last line of defense for the bulls - the 60 lines. How long can it hold is the big question.
NIFTY -
On the monthly chart, Nifty looks more or less like Bank Nifty, however, the key difference is that its RSI is well above 60 and this may be due to the HDFC - Reliance - Infosys - TCS, the Quadruplets’ contribution which has often saved Nifty from falling when Bank Nifty witnessed free falls.
Nifty is another 1000+ points away from its 50 Weekly Moving Average but it is facing resistance of the 20 Weekly Moving Average and when the sentiment is selling oriented, it would be hard for the index to cross the line with ease. It would need the Quadruplets to work their way up to lift Nifty above the line and that would also force Bank Nifty to re-think about its positioning.
On the daily charts, it is looking very weak as it is alternating between 1 positive day and 1 negative day, but the negative days are longer than the positive days and that is what is the main issue. It also has 20 DMA and 50 DMA resistances to clear so the task has been cut out and unless the Quadruplets deliver a strong performance, we are in for some more days of high Vix and sideways or no meaningful movements.
Purely on a comparison of the daily charts of Nifty Vs Bank Nifty, Nifty appears to be weaker as Bank Nifty has 200 DMA line closer than that of Nifty. This in my view indicates that it is Bank Nifty who may help rally Nifty as long as it stays well above the line.
Even though the scenario going in to the next week may look dismal or bearish, from investors’ viewpoint, every dip in the indices is opening up new opportunities as many leading scrips have reached or may reach their bases which is a good sign. From a trading viewpoint, Supports to Resistance and or Resistance to Support trading is the most beneficial during such times.
Here is the video link:
Please feel free to comment/share your feedback as, like you, I am also a learner of the markets!
Happy Trading/Investing!
Umesh
4-12-21
This is a new weekly post/series where I will briefly capture the key highlights of the 2 leading indices. This post is supported by a video that talks more about the key stocks that form the indices. One of the reasons for starting this series is that there are many readers/viewers who are positional traders or investors and for them, weekly analysis of indices would be of more interest than a daily EOD analysis.
I hope that this effort would help the readers and viewers to get a crisp idea about what happened in the markets over a period of one week.
Important - Although the markets are very hard to predict in the short term, the main issue presently faced is that even on an intraday basis, the markets have been extremely volatile. This may impact the traders who trade on an intraday basis. If you are one such trader, please be careful and assign topmost priority to risk management.
BANK NIFTY
The comparison is done with 26-11 Numbers as this relates to last week’s closing.
EOD on 26-11-21 = 36025
EOD on 3-12-21 = 36197 up by 171 points or 0.48% from 26-11-21
The highest level in the week ending 3-12-21 = 36844 on 3-12-21
The lowest level in the week ending 3-12-21 = 35328 on 29-11-21
Difference Highest - Lowest = 1516 points or 4.30% from the lowest level
In the last one month - from 5-11, Bank Nifty has made a downward move of 3376 points or 8.53% which is quite a significant move.
NIFTY
The comparison is done with 26-11 Numbers as this relates to last week’s closing.
EOD on 26-11-21 = 17026
EOD on 3-12-21 = 17197 up by 170 points or 1.00% from 26-11-21
The highest level in the week ending 3-12-21 = 17489 on 3-12-21
The lowest level in the week ending 3-12-21 = 16782 on 29-11-21
Difference Highest - Lowest = 707 points or 4.21% from the lowest level
In the last one month - from 5-11, Nifty has made a downward move of 720 points or 4.02% which is a significant move.
FII - DII DATA:
NOV 2021
FIIs = -39,897 Crores
DIIs = 30,555 Crores
Net is negative = -9,342 Crores
DEC 2021
FIIs = -7,030 Crores
DIIs = +6,488 Crores
Net is negative = -542 Crores
Conclusion:
Here is an interesting observation that I made while writing this post:
On 01 Nov, Nifty ended at 17929 which is not far away from the 1st weekly close price of Nov 21 - 17916. From there, in a matter of 1 month, Nifty has fallen 720 points and the Net FII-DII number is -9884 Crores. So for every 13 Crores sell made by FII-DII,Nifty fell by 1 point.
Our indices tend to follow global cues when it is negative and ignore the positive global cues as at that time FII gets in to the act of selling despite the domestic cues not being negative at all.
The relentless selling on the part of FIIs is not going to let the indices breathe easy. I am thinking if the DIIs have enough funds at their disposal to counter FIIs planned selling efforts. If they do not have the money power, our market would keep drifting down with every 13 Crores sold.
BANK NIFTY -
Bank Nifty broke 200 DMA on 29 Nov and then bounced back up from there on a closing basis and thereafter has not been able to stay far away. Somehow, it is getting recalled by the Big Daddy of Moving Averages. This is not a good sign once the index has already bounced off from below the line.
36800 is the key resistance line for Bank Nifty and as long as it does not close above the line on the daily charts, the weakness is likely to continue as we have seen in the week that was just concluded that the sellers become active as soon as it nears any significant resistance level.
The RSI is also languishing below 40 indicating that the sideways moves may continue for some more time. Unless the RSI closes well above 40 on the daily charts, we may keep experiencing such moves.
On the weekly chart, the index is thoroughly confused as the candle formation is that of a thin Doji - indicating that neither bears nor the bulls know what needs to be done next. In one of my earlier posts I had mentioned that the indices need some mentoring help and that is what has been happening.
It has so far managed to end above the 50 Weekly Moving Average which is not very far from the swing lows of Bank Nifty.
The monthly chart of the indices shows a very dismal picture; the only solace is that the RSI is making its best efforts to cling on or around the last line of defense for the bulls - the 60 lines. How long can it hold is the big question.
NIFTY -
On the monthly chart, Nifty looks more or less like Bank Nifty, however, the key difference is that its RSI is well above 60 and this may be due to the HDFC - Reliance - Infosys - TCS, the Quadruplets’ contribution which has often saved Nifty from falling when Bank Nifty witnessed free falls.
Nifty is another 1000+ points away from its 50 Weekly Moving Average but it is facing resistance of the 20 Weekly Moving Average and when the sentiment is selling oriented, it would be hard for the index to cross the line with ease. It would need the Quadruplets to work their way up to lift Nifty above the line and that would also force Bank Nifty to re-think about its positioning.
On the daily charts, it is looking very weak as it is alternating between 1 positive day and 1 negative day, but the negative days are longer than the positive days and that is what is the main issue. It also has 20 DMA and 50 DMA resistances to clear so the task has been cut out and unless the Quadruplets deliver a strong performance, we are in for some more days of high Vix and sideways or no meaningful movements.
Purely on a comparison of the daily charts of Nifty Vs Bank Nifty, Nifty appears to be weaker as Bank Nifty has 200 DMA line closer than that of Nifty. This in my view indicates that it is Bank Nifty who may help rally Nifty as long as it stays well above the line.
Even though the scenario going in to the next week may look dismal or bearish, from investors’ viewpoint, every dip in the indices is opening up new opportunities as many leading scrips have reached or may reach their bases which is a good sign. From a trading viewpoint, Supports to Resistance and or Resistance to Support trading is the most beneficial during such times.
Here is the video link:
Please feel free to comment/share your feedback as, like you, I am also a learner of the markets!
Happy Trading/Investing!
Umesh
4-12-21
