AAKASHAYA PATRA WEEKL1Y MARKET OVERVIEW: 10.10.2020

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We have witnessed a stupendous move everyday one after other this week. The surprising thing was the Gap up openings that we witnessed literally every day starting from Monday. The first day rally came due to gap up and final close was quite lower than the day's top. Next 2 days were nice gap ups and yet higher close. Thursday expiry day was continuous up move throughout the day but at the end a quick down move and then an up spurt was seen. Friday was no different where though out the day we witnessed slow and steady up move. Friday finally summed up creating 7 straight higher closing sessions and the best weekly gains of last 4 months. NIFTY and BANKNIFTY gained +4.36% and +7.20% for the week. MIDCAP and SMALLCAP hardly did anything compare to their larger counterparts with -0.19% and +0.26% respectively. NIFTY IT and FINANCE were continuous outperformer with weekly gains of +8.59% and +6.38% respectively 

Technically Speaking:-

Please see the attached chart 1of NIFTY which is a Weekly Chart. I have chosen NIFTY weekly chart instead of a Daily chart is even this time for same reason. The reason being the strong base that NIFTY has can be marked well on weekly chart. The same support region can be easily understood if we study the marked yellow horizontal line in the attached chart. This time the purposely I have shifted a base littler higher from last time. Hence, support region this time is going to be like 11100 kind of levels. Also the open the current week at about 11500 kind of level is also an important support because the move this week had a great traction with increased volumes. So for the next few weeks we have got to see 11500 as first support and 11100 as second and main supports. With all these technical indications, we also have to realize that just in last 2 weeks we have cleared the distance from 10800 to 11900 kind of levels now. This is about 1100 points in 10 trading sessions. Last few days up move has majorly came from the short covering and limited fresh buying. So with the trend, we have got to be bullish but we have got to be bullish cautiously is my advice. Cautious bullish means avoiding fresh buying at current levels and holding all longs with strict stop loss and trail them as market goes up. 

Attached chart 2is also a weekly chart of BANKNIFTY. This chart also suggests that the strong support base is shifted towards up side in the BANKNIFTY. This support region comes to about 21050 kind of levels. Currently if we see, we have come quite above our marked supports in the chart. The way we have identified the open of the weekly levels as important support, even in BANKNIFTY the same level comes to around 22300 kind of level which is another good support for us. BANKNIFTY on the last 2 days have witnessed even bigger up moves compare to NIFTY.

Even in BANKNIFTY lots and lots of shorts have contributed to up move more than fresh buying and hence we have come to a level where some caution is good. In order to guide all the SMART INVESTMENT readers, I have created a FREE MARKET OUTLOOK write up services which everyone can subscribe from our website. In this service, I write market outlook for every one of you reader on daily basis and update the same on our website before 7am every day before market opens. You all are welcome to visit our website and subscribe the same.

On current week's OI data it is very much clear that there are more PUTS OI is accumulated compare to that of CALLS both in NIFTY and BANKNIFTY. Surprisingly there are still many shorts trapped as can be seen in OPTION CHAIN. On NIFTY 1.8M CALLS at 11900 strike and 780K CALLS on 11800 strikes are trapped. The same way, on BANKNIFTY 190K CALLS at 23800 strike and 390K CALLS at 23500 strikes are trapped. These trapped calls on NIFTY and BANKNIFTY can still make sure some higher levels to cross. On NIFTY, higher CALL OI is witnessed at 12000-12200 levels & higher PUT OI is witnessed at 11800 and 11700 levels. On BANKNIFTY, higher CALL OI is at 24000-24500 levels and PUT OI is at 23500-23000.


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