WEEKLY ANALYSIS OF STOCK MARKET - 18/07/2022
Updated: Jul 17, 2022
Support and Resistance for Nifty & Bank Nifty as per Technical Analysis & Derivative Analysis (Option Chain) for the upcoming week 18/07/2022.
Content-
Nifty Analysis,
Bank Nifty Analysis,
Brainstorming Point,
Sectors in Focus for the Coming Week,
Buy Recommendation and Watchlist Stocks, and
Previous Week Performance Report.
Technical Charts of the Recommendations.
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NIFTY ANALYSIS
COMMENTARY-
ACCORDING TO THE TECHNICAL CHARTS-
In the weekly time frame, the structure of the Nifty is Still Bearish as 20SMA (16556.65) is below 50SMA (17064.30). The Resistance/Supply Zone is also around 20SMA which is 16404.55-16610.95 & the Support/Demand Zone is 15671.45-15739.65.
RSI is at 44.78 which is a Bear's area and RSI is in a downtrend.
In the daily time frame, the structure of Nifty is Bullish as Close on Friday i.e. 16049.20 is above 20SMA(15844.50) & 50SMA(16027). This is 2nd time, this month that Nifty attempted and closed above 50SMA, the first time it went above 50SMA & struggled to stay there, then came below 50SMA. The Resistance is at 16275.50 and the Support/Demand Zone is 15844.50-15858.20 which is around 20SMA.
RSI is at 52.49 which is a Bull's area and RSI is just reversed from 48-49 levels.
India VIX is at 17.5975 is telling us that there is no panic at current levels and the market can go higher. Volatility will be low in the coming week.
ACCORDING TO THE OPTION CHAIN DATA-
Currently Nifty is trading at 16049.20, but the options data is suggesting the highest open interest on the call side is at 16600 which is very far, also 2nd highest open interest is at 16500. At the same time, the highest open interest on the put side is at 16000 which is very near, also 2nd highest open interest is at 15900.
We can clearly see that Call ITMs are squaring off their positions but at the same time Put ITMs are building up their positions.
The resistance/Supply Zone is 16500-16600 and the Support/Demand Zone is 15900-16000.
CONCLUSION AND STRATEGY-
As per the above analysis, we can conclude that in daily time nifty is bullish which is also suggested by option chain data but in the weekly time frame, nifty is bearish.
Weekly 20SMA is in the area which is also suggested by the option chain data, hence we can say if nifty takes bullish momentum from here, it can go till 16500-16600. Also, the downside is limited but still, we need to be cautious while taking any position.
India Vix is at a lower level in recent times.
One can make Bull Spread or can do Future Hedge. I will not suggest any naked position, hedged position will do good... Lower Profits but Losses can be Controlled. One should not sell CE as of now, PE can be sold 200 points below support levels with Hedge. DO NOT GO WITHOUT A HEDGE. If the market reaches 16500-16600 and gives a reversal signal from resistance then only we can sell CE (but again with Hedge) or make a bear spread or can do Future Hedge.
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BANK NIFTY ANALYSIS
COMMENTARY-
ACCORDING TO THE TECHNICAL CHARTS-
In the weekly time frame, the structure of the Bank Nifty is Still Bearish as 20SMA (35118.35) is below 50SMA (36443.10). The Resistance/Supply Zone is around 50SMA which is 36083.70-36309.30 & the Support/Demand Zone is 34018.45-34233.
RSI is at 47.40 which is a Bear's area and RSI is in a downtrend and just reversed from the 49-50 zone.
In the daily time frame, the structure of Nifty is Bullish as Close on Friday i.e. 34682.65 is above 20SMA(34003.05) & 50SMA(34229.35). The Resistance is at 35543.10 and the Support is at 34463.90 if this breaks the Support/Demand zone is at 34223 which is around 50SMA.
RSI is at 54.63 which is a Bull's area.
ACCORDING TO THE OPTION CHAIN DATA-
Currently Bank Nifty is trading at 34682.65 and the options data is suggesting the highest open interest on the call side is at 35000 which is very near, also 2nd highest open interest is at 35500. At the same time, the highest open interest on the put side is at 34500 which is also very near, and 2nd highest open interest is at 34000.
At the same time, there is a very interesting thing happening on Call Side, 34500 has 40K open interest and almost 31K has been added on Friday itself. Someone has made a big position in Bank Nifty for the downside. It might be a clue that Bank Nifty will fall down or might be it will remain range bound for a week because put side also approx same no. of open interest(32K) has been added on Friday.
CONCLUSION AND STRATEGY-
As per the above analysis, we can conclude that in the daily time Bank nifty is bullish, but in the weekly time frame, nifty is bearish. At the same time, the option chain is suggesting us bearish or range-bound Bank Nifty for the coming week.
One should wait for a clear signal to make any position.
If it remains range-bound one can make Iron Fly or Iron Condor, but here is the catch what should be the strike price. So, here I would like to answer the question, check the weekly time frame's support and resistance and make the position 300-500 points away as per the risk appetite.
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BRAINSTORMING POINT
Nifty is Bullish but at the same time, Bank Nifty is Bearish or Range Bound.
As we all know Bank Nifty has the Highest Weightage in Nifty and if Bank Nifty is not going to support a bull run then what else? Reliance, IT Sector, Metal, Auto?
Let's make this Blog interesting and for that, I am attaching a Poll. Vote for your answer.
If Bank Nifty is not going to support Nifty for a Bull Run, then What else?
- Reliance
- Nifty IT
- Nifty Metal
- Nifty Auto
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SECTORS IN FOCUS FOR THE COMING WEEK
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Stock Recommendation and Watchlist Stock for the Coming Week-
*Charts of the above are shared below
A detailed Discussion has been uploaded on Youtube. Youtube Channel Link- https://www.youtube.com/channel/UCO7eWmpdFiXyeL_KnipvsBg
Comment, Share, and Subscribe.
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PERFORMANCE REPORT Stock Recommendation and Watchlist Stock of the Previous Week
A detailed Discussion has been uploaded on Youtube. Youtube Channel Link(Buy)- https://www.youtube.com/watch?v=FwXxkyrrOR0&t=8s
Youtube Channel Link(Watchlist)- https://www.youtube.com/watch?v=UqN1ZretRLs&t=200s
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CHARTS-
TVS Motors
Bajaj Auto
Adani Total Gas
GRPL Ltd
Lumax Auto
Swan Energy(Daily)
Hindustan Unilever(Daily)
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