Analysis of Bank Nifty & Nifty for the week ending 10 Dec 21DATA DRIVEN ANALYSIS OF NIFTY & BANK NIFTY FOR THE WEEK ENDING 10-12-21
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 takes you through the details of how I have arrived at the analysis. 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 top most priority to risk management.
BANK NIFTY
The comparison is done with 1-12 Numbers as the start of the month.
EOD on 1-12-21 = 36364
EOD on 10-12-21 = 37105 up by 741 points or +2.04% from 1-12-21
The highest level in the week ending 10-12-21 = 37397 on 9-12-21
The lowest level in the week ending 10-12-21 = 35696 on 6-12-21
Difference Highest - Lowest = 1701 points or 4.77% from the lowest level
In the last one week, Bank Nifty has made an upward move of 901 points or 2.51% which is a good change.
NIFTY
The comparison is done with 1-12 Numbers as the start of the month.
EOD on 1-12-21 = 17166
EOD on 10-12-21 = 17511 up by 345 points or +2.00% from 1-12-21
The highest level in the week ending 10-12-21 = 17543 on 9-12-21
The lowest level in the week ending 10-12-21 = 16891 on 6-12-21
Difference Highest - Lowest = 652 points or 3.86% from the lowest level
In the last one week Nifty has made an upward move of 314 points or 1.83% which is a good sign.
FII - DII DATA:
Note: Last week a reader questioned my way of averaging the FII DII net numbers per every point move in Nifty. I analyze this for my learnings and share the same for your reading. If you do not agree, I have no issues as that is quite natural and that is how traders make money - one does not agree with the view of the other.
DEC 2021
FIIs = -16,231 Crores
DIIs = 12.697 Crores
Net is negative = -2,534 Crores
If we simply extrapolate the same for Dec 21 at the rate of 4.8 times , we arrive at 12,163 Crores. I would be happy if I am proven completely wrong on the downside as that would mean that the traders/investors in general who are long would benefit as the indices would have then moved up assuming that DIIs do not switch
Conclusion:
This week, the 2 tradable indices have followed the global cues to a great extent. This is a welcome change as till recently, we used to selectively not follow the global cues thanks to the FIIs increasing their selling pressure when they pleased so.
The relentless selling on the part of FIIs is not going to let the indices breathe easy. I am not sure if there is any data that gives us some idea about the quantum of the holdings of FIIs and DIIs. If any of the readers are aware, please do share.
SGX Nifty is as of the end of the week indicating a 75+ points close but our markets may experience a sell-off if they open with a big gap-up as that has become the norm since FIIs have moved into a selling mode.
BANK NIFTY -
The highest close on Nifty was at 18445 on 18-10-21 and the lowest in almost 2 months was at 35327 on 29-11-21. Bank Nifty is currently 4724 points away from the ATH close and 1778 points away from the swing low.
The above means that Bank Nifty is still not out of the woods and the path of least resistance is on the downside.
This is purely from the EOD as well as Swing Low numbers point of view and ignores any technical indicators or tools that may be in use. However, price is supreme and that is what it indicates as of now.
The fact that Bank Nifty is almost 1500 points up from the week’s low is a good sign indeed.
In my view, Bank Nifty is likely to outperform Nifty in the medium-term which is 1-3 months.
NIFTY -
The highest close on Nifty was at 41238 on 26-10-21 and the lowest in almost 2.5 months was at 16782 on 29-11-21. Nifty is currently 934 points away from the ATH close and 729 points away from the swing low.
The above means that Nifty is still in indecisive mode with the path of least resistance on the downside.
This is purely from the EOD as well as Swing Low numbers point of view and ignores any technical indicators or tools that may be in use. However, price is supreme and that is what it indicates as of now.
Nifty has moved up from the swing lows in a nice manner and reduced the extent of negativity by almost half since the last week despite the first 2 sessions during the week registering lows below 17000.
In the end, with Nifty at 17500+ and Bank Nifty at 37100+, all does not seem to be that bad as well and the intense volatility and choppiness may be around for a while, but the indices may well have formed a lower base already. For Nifty around 16700-800 and for Bank Nifty 35000-35200.
Here is the video link:
Please feel free to comment/share your feedback as, like you, I am also a learner of the markets! And therefore, I have the right to be wrong on either side as no one can predict the moves.
Happy Trading/Investing!
Umesh
11-12-21
