NIFTY weekly view June 22 - 26

21 thg 6, 2020

Review of last weekly view

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Things I am sure of (~80%)
1. NIFTY to stay above 9600
2. There will be resistance from 10200-10500

Things I am somewhat believe (~60%)
NIFTY likely to be choppy movements in the region 10000-10300. Range boundaries could be 9850-10300.
Another touchdown of the 9730-9840 region is possible.
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I was right on
NIFTY stayed above 9600.
Resistance above 10250 is not validated.
Touchdown of 9730-9840 happened.

I was wrong about
Choppy movement in the region 10000-10300.
The strong move signal was estimated in my daily post

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For this week, I observe the following interesting things

1. Weekly NIFTY created an inside candle. This week’s inside candle has lower volatility, but similar structure. It is a hammer like candle. This indicates at least support and somewhat bullish bias.This candle has its open and close above 9800-0850 region. This confirms the earlier intermediate breakout.
2. BANKNIFTY is also moving in a similar direction and with equal strength. This adds credibility and support to the move. If next week, BANK NIFTY closes above 21500, it is a bullish sign.
3. INDIA VIX, the volatility index has cooled off from 33 to 30. If we see an up move or VIX goes below 28, it’ll be another positive sign.
4. Another technically important thing is that NIFTY closed above the 20 day simple moving average.
5. From 10300-10600 there is a confluence of resistance triggers. In this zone NIFTY is likely to be very vulnerable, It is not correct to say NIFTY will make a u-turn, but I assume some consolidation in the region.
6. This week is the last week of the trading month. Last two months, we saw very strong moves towards the end of the series. It is difficult to predict if it is going to happen again.

Here is my rough sketch for next week.

I am sure about (~80%)

NIFTY to touch above 10300.
NIFTY is likely to face strong resistance in the 10300-10600 region.
The top end of the range I estimate is 10600-10700 for this week.

I somewhat assume (~60%)
Less and less volatile as the week progresses.
Another break below or touch of 10000 region possible.
Trapping both side traders, without clean swing. Example - gaping up but not sustaining gaps, gap down and recover fast etc. But this week I think it'll be less volatile.

Some trade Ideas based on my view

Create credit PUT spreads 8800-8700 SL 8800
Create credit CALL spreads 8600-8700 SL 8600
Straddle or Iron Condor with 10000 - 10300, for aggressive traders.

Overall, after multiple good days~ trading days, I plan to observe the market this week rather than trade it. Last week, the resistance zone is going to make trading difficult this week.