30th Aug 2021 - Nifty / BankNifty Weekly Analysis

 Hello Everyone,

It has been so long that I posted my analysis here for Nifty and Banknifty. It is time for me to step up and do at least a Weekly and Monthly analysis on both indices and some stocks from time to time. I really miss posting some of my views and I have been busy with my investments, trades, and of course work.


  • Terrific highest weekly closing. Relentless move without any significant down moves, which indicates strength.
  • Large-caps have been moving for the last 3 weeks and the broader market hasn't been performing great.
  • Noticeable sector rotation going on. Underperformance in Pharma, Auto, Banks, Realty and outperformance in Capital goods, IT, FMCG. Cement and OMCs look like going to step up for the next rally.
Let's dive into the Weekly Analysis for Nifty using Market profile and price action,


  • Last two weeks, Nifty has formed a very strong base of around 16400. That is where the single prints from the Week of 9th August acted as strong support.
  • Refer to the following Weekly NiftyFuture MP chart.


  • Now a new base is formed around 16530 (24th Aug VPoC) to 16550, refer to the Daily Nifty Future Chart.
  • Also, do note, there is an anomaly in the structure from 24th Aug 2021 (Marked in Red). Price will eventually correct and repair the anomaly. My understanding is, it can test the same zone next week.

  • Even though SGX indicated a strong price movement towards the 16800 zones and if we get a gap-up on Monday, I would wait to enter new longs. 
  • As per Fibo-Extension, the 16880 zone in the Nifty Spot price (Not future) is a very strong resistance. 
  • I don't imply that I am bearish, just saying price can stay sideways too. 
Conclusion for Nifty is Strong Price action due to Reliance, ITs and Bajajtwins. Banks are becoming bullish, I will explain this with a Banknifty chart. 

Zones to Watch closely,
For Nifty Spot - 16880 (Resistance) and 16530 (support) for the week.
For Nifty Future - 16860 (Resistance) and 16550 (support) for the week

The PoCs and Value Areas are visible in the chart, i am not going to type it.

Let's Dive into Banknifty,

  • Everybody knows Banknifty has been underperforming for a long time now. But, as per the price auction and weekly profile structure, BN is slightly turning bullish.
  • Until now ICICI played a big role in supporting the Bank Index and HDFC bank to a certain extent. But this time based on charts, it is clear Axis Bank, Kotak Bank can lead the Bank index. 
  • Refer to the following Weekly Bank Nifty Future Profile,


  • We can see the 34650 is very strong support and 36300 is a very strong resistance. Technically the BNF has been in this range all this while.
  • For this week, Refer to the daily chart as follows, Strong support is between 35200 and 35400. Resistance is between 36000 to 36300. 
  • Once any of these range breaks, we can expect a huge movement. My bet will be on the upside until we break 35200 this week. 


Conclusion for BankNifty - Stuck in Range and different banks are auctioning differently. But some stocks like Axis, Kotak bank and Indusind. HDFC Bank can also support and start some substantial up-move.


I usually never Short a stock, I always short index. So, for longs this week, the best Risk reward ratio is there for the following
  • OMCs (ONGC, BPCL, IOC, HINDPETRO)
  • BANKS (AXIS BANK, KOTAKBANK)
  • ADANIPORTS
  • CEMENTS (ACC, AMBUJA) and lastly
  • NavinFlourine and UBL

Always wait for a good pullback and take longs at support. Trade safe, Respect risk.

Thanks,
Chan

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