Weekly Analysis 27-31 July of Nifty and Banknifty & best 5 stocks

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What Happened Last week from 27-31st July??

After long Upside in Nifty from 7500 to 11300, now we are seeing some Consolidation. In fact, on 30th and 31st we saw big selling in Nifty and Nifty bank as well.

Now it’s time to get cautious for Bulls, I feel so. Does it mean Nifty will reach 7-8-9k? It’s too early to say, but certainly, there are multiple support zones in the middle, so we will be talking as per levels and why there is a need to get cautious. Let’s see.

Technical analysis of Nifty and Banknifty

Candlestick

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Daily chart of Nifty50

Nifty50 in the daily chart you can see it’s trying to break the Box on the downside with good volume. It almost managed to do it on Friday, but then we saw some bounce from support levels, and that’s why the Daily candle on Friday is a bearish candle but not Bearish MARUBOZU like Thursday.

Weekly chart of Nifty50

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 Weekly chart is more interesting than daily chart, as if you closely observe you will see that after 6 green candles, we have the first red candle this week. That’s the reason I said the Bulls have to be more cautious now. Also, if you notice, Then the previous support for Nifty is now very strong resistance.

Nifty bank

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In the case of Nifty bank, 21500 Nifty banks holding up, but much strong support here will be 21000. If broken, we will see a Big fall In the Nifty bank. Also not to forget two rejections from the 23000-200 zones as well.

 PIVOT POINT ( SUPPORT and RESISTANCE)

For Nifty50

If Friday’s low is broken, then I see Nifty heading for 11000 and then 10600-10800 will be a strong zone. After that, 10400 will be the FIBONACCI RETRACEMENT level, another strong support. There is strong resistance zone and if crossed then we are looking for 11500 on upside 11250-1300. But as of now, it looks difficult.

Nifty Bank

Now in the case of Nifty bank, 21500 is immediate support,  but there is a strong support at 21000 levels. As previous strong support is now becoming strong resistance.

Upside 22000 is strong and immediate Resistance, but if Bulls need a fresh rally in Nifty bank, then 23000-23220 is hell of a resistance for Nifty bank from where it got rejected and came down twice already, so no fresh rally in Nifty bank unless it closes above this point in the daily chart.

Moving average -:

Nifty50 has a high of Friday candle near 5-day EMA which is 11131. So that’s the first level it has to cross. And on the downside, 11000 is 20-day EMA and 10595 is 200-day EMA which will act as very strong support.

Nifty bank

On Friday Nifty bank just managed to hang on to the support of 50-day EMA at 21640,

on upside 21900 is 5 day EMA , 22200 is 20 day EMA and 22323 is 100 day EMA. so 22000-22300 zones is becoming a strong resistance now.

Option chain -:

NIFTY50

On the call side , Nifty has strong resistance from 11100 to every 100 point intervals, especially 11200 level, which has huge call writing. So call writers believe this level won’t be breached at all.

Where as put writers did huge writing near 10800 and then 10400 levels. Maximum Open interest is at 11000 level, so if this level is so safe, Nifty50 will sustain on the higher side, but if broken, we will see an easy target of 10800.

Nifty bank

On the call side, Huge writing and Open Interest at three levels 22000, 22500 and then 23000 levels are a very strong resistance zone for Nifty bank. Call writers slightly getting increased at 22500 now than at 23000 levels. Which is making 22500 level tougher for Bulls.

On the other hand, 21500 is an immediate support zone, but 21000 will be a strong support zone in case Nifty slides as it has 5lakh+ open interest. Big rally on the downside only if Nifty bank breaks 21000 levels.

PCR ratio -:

Below 0.7 = Over sold

Near 1 = Neutral

Above 1.5 = Over baught

Put call ratio for

Nifty-:  0.7661

And in Nifty bank = 0.7069

So, as per PCR ratio, Nifty and Nifty bank both are just near the oversold zone but not inside of it. So now when Nifty and Nifty bank rise only when it breaks the PCR ratio of the previous day on the higher side.

Nifty PE ratio

Nifty PE ratio is above 30 now for first time ever but which will be very warning sign for Bulls. As it suggest Nifty is not just at high level right now but at Mount Everest point.

Heikin Ashi -:

Hekin Ashi though shows an accurate trend, but it’s lagging Indicator as it follows previous candle prices.

Both for Nifty and Nifty50 Hekin ashi is suggesting bearish trend at the moment.

My view on Nifty and Nifty bank -:

For Nifty50, Friday’s low is a very crucial level, which is 11026, and we have strong support near 11000. So remember, if 11000 is broken, then we will see a big 100-200 points fall in Nifty50.

11200-11300 will be strong resistance for Nifty, and if crossed, then only we will see fresh upside rally here.

For Nifty bank 21000 will be a key level. If broken, then the fall will be big in Nifty bank, and for the upside, 22500 will be strong resistance now instead of 23000 as per option chain.

Stock to watch out for

Last week, we shared a chart and explained 7 stocks. Let’s see how it turns out.

1.           Reliance chart was shared when stock was at 2146. Our view was small upside and then fall as per RSI level.

Reliance went to 2200 and now to 2050.

2.           IGL was given at 403 as stock was oversold, made a high of 415 and now holding up at same 400 levels.

3.           APLLTD given at 980, Stock made a high of 1010

4.           Laurus labs turned out JACKPOT as we gave its weekly BREAKOUT chart. Stock was given at 729, now at 930+. Another JACKPOT

5.           Sunpharma again UNSTOPPABLE. Was given at 504, and we said it’s a big Resistance, it will be 512-513. If cross, then upside here. Stock is now at 531, and it still has a scope for Upside.

6.           TCS given at 2157, made a high of 2350+ and then at 2281.

7.           ICICI Bank 381 was our level. If it crossed 400, we expected more upside, but it didn’t, and now it is at 346.

Let’s see stocks for this week now,

1.           Relaxo.

We have only two leading companies, one is Bata and the second is Relaxo in the footwear sector.

Last year Relaxo gave better numbers than Bata in RoE, ROCE and Return on assets. Also in profit as well. This year as malls closed, schools shut down in lockdown still it managed to give satisfactory numbers on Saturday.

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On daily chart stock was oversold when near 580-600 zones and Friday showed some bounce forming. Long legged Doji suggesting bears are now getting weak. Also, also on last Wednesday an inverted hammer formed in the daily chart. Let’s see the second chart of Relaxo,

You can see volume bar 1 when the stock was 800 level operator dumbed this stock and then it went down to 650 in this chart. See the second volume bar where Retailers bought it and then dumbed it again, and now an interesting thing is the volume bar where 3 operators made an entry in the stock.

Below 600, this stock is worth buying if you get it.

Near 580 it’s a good buy, and below 550 it will be a dream price to buy.

Past one year inspite of this downside stock gave 41% returns, and in 3 years stock gave 110% returns, so more than money double, so I see nothing wrong with the fundamental but opportunity to invest in a great stock.

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1 thought on “Weekly Analysis 27-31 July of Nifty and Banknifty & best 5 stocks”

  1. Superb Article. Thanks for such information. Can u pls let me know the Stop loss to hold Dmart and IRCTC, which I am having for a long term investment point of view

    Reply

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