Expectations, Support & Resistances

:: How the market turn out last expiry and our view?

Our View last week:

Price action looks very bullish in the daily time frame too. After a healthy correction as anticipated, NIFTY 50 corrected about 108 pts on Wednesday and Thursday sessions and closed above 18500 level and price action as of now is pretty bullish.

On Monday if the market opens up and sustains above 18500 levels for few hours, market is likely to continue with the trend and face resistance at 18600. And with US market trading higher today with the cheers of US debt ceiling bill and FED positive vibe on possible rate hike pause hint.

Market very likely to move higher, if no negative news plays spoilt sport, but volatility can be expected with RBI rate hike decision on 8th June 2023.

The price action on hourly chart market, looks like it is forming a triangular pattern with multiple rejection from the falling trend line, hence break out on any direction could give a strong convincing move. If it opens gap up, it could suggest a break out but we need watch 18600 level as it has been rejecting multiple time from this level. Even OI data also indicates a strong call writing at this level.

Market Traded or Behave:

Even though our view as per the technical and data analysis were all bullish, market could not sustain above, and even with positive thrush by RBI MPC, it was unable to sustain at the high. It touched a new swing high, though and then it fell from there. Strangely market is behaving strange, VIX is rising when market rises and falls when it fell- which is unusual.

Now the focus shifts to FED’s MPC and on the following events which are lined up:-

• 13 Jun 05:30 PM Inflation Rate YoY MAY India ***
• 13 Jun 06:00 PM Inflation Rate YoY MAY USA ***
• 14 Jun 11:30 PM Fed Interest Rate Decision USA*** 5.25%

:: Technical Analysis        

Weekly View– After a continuous rise week on week, last week showed some tiredness despite touching a new swing high on weekly chart and a series of positivity, the market failed to sustain above and in fact closed lower than the week before. Technically it is still bullish, as it closed above 18477 – 18500, but it is time to trade cautiously on the bull side, for the following reasons:-

1. Despite the positivity thrush by RBI MPC, it failed to sustain market in high zone.
2. In fact on Friday, despite positivity built by US markets, Indian market failed to maintain the status quo.
3. VIX which usually is inversely with market is now directly proportional.

Refer the Fig. 2

Daily View- On the daily chart market looks like it is developing a bearish divergence, despite so much positivity built on Thursday by RBI MPC, followed by rise in US markets, Indian market on Friday seen a sell off. NIFTY 50 failed to sustain the highs. However the Price action is still bullish, if the market sustains above 18550. But it is time to play cautiously.

Refer the Fig. 3

The price action on hourly chart market, is Bearish and it was not able to break out from the trend line. And market on Monday is very crucial, if it starts trading below 18550 level, we can start taking bearish trades on positional basis.

Important Levels:

Resistance – 18550 – 18600

Support – 18450 -18500

No trading Zone-  18500 -18600

Previous Day – Negative

Previous Week – Negative

NOTEWORTHY:-

Points to remember on this upcoming week:-

1. Despite the positivity thrush by RBI MPC, it failed to sustain market in high zone.
2. In fact on Friday, despite positivity built by US markets, Indian market failed to maintain the status quo.
3. VIX which usually is inversely with market is now directly proportional.

On the daily chart market looks like it is developing a bearish divergence, despite so much positivity built on Thursday by RBI MPC, followed by rise in US markets, Indian market on Friday seen a sell off. NIFTY 50 failed to sustain the highs. However the Price action is still bullish, if the market sustains above 18550. But it is time to play cautiously.

The price action on hourly chart market, is Bearish and it was not able to break out from the trend line. And market on Monday is very crucial, if it starts trading below 18550 level, we can start taking bearish trades on positional basis.

Seems like Bearish divergence is forming in the shorter time frame.

:: Data Analysis

FII & DII Activity- 

Bearish Activity by FIIs

FII Cash :: ▼ -₹309.0 Cr

FII Futures :: ▼ -₹617.7 Cr

DII Cash :: ▲ +₹1,245.5 Cr

Open Interest (OI)- 

Lots of Fresh call writing of about 1.61Cr observed at 18700, and put writing of about 0.67Cr at 18700 level, these levels could be crucial this week, but no significant resistance on the downward side.

PCR                    – 0.7 (-) Mildly Bearish.

:: Market Sentiments

World Markets – World market traded MIXED and flat, however NASDAQ traded higher could be good reason to cheers for Indian Tech companies.

SGX N50 – Closed around 18662 at 9:24am 11-06-2022

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Disclaimer:-

The above analysis is solely the opinion of the author, no way an assured tips/direction to trade, they are solely for educational purposes. Please do not trade with out a proper study and analysis, we will not be responsible for your loss. We are not SEBI registered.

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