Nifty and Bank Nifty weekly sentiment maintains positive despite weakness in the market. Last week DII continued their relentless buying mode despite weakness in the market and with the continue FII selling pressure. US Market (S&P500) closed with marginal weekly gains with a surprising fierce up move on the friday trading session. India VIX continued its downtrend despite weakness in the market which indicates lack of fear in the market at this point.
The recent move in Nifty Futures are clearly driven by Short term players. Nifty Futures positive sentiment continues however sooner or later we can expect the trend to reverse when the sentiment gets over heated. Bank Nifty is showing divergence as the sentiment turns negative and continues to underperform Nifty Futures.
It is interesting to note that DII’s are relentlessly buying the equity market right from 12th June 2015 despite Greece Exit fears, Global Meltdown and Indian Market seems to be resilient to such macro events. Monday panic gap down in Nifty Index countered by late session rally on both monday and tuesday.
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The Nifty Futures and Bank Nifty Futures continued to move up last week, gaining 2.2% and 1.0% respectively on close. And Bank Nifty is relatively under-performing in the recent uptrend. However this may so far foreign investors are relentlessly selling in equity market and Debt Market and had pulled out more than Rs 14,000 crore. The Outflow of Debt Market is far steeper than Equity Market.
High probability bottom signal in Nifty Future on the EOD charts. Autocorrelation maintains negative which indicates a possible mean reversion mode in Nifty futures and the oversold smooth oscillator indicates the oversold level. 8498.1 is the previous low on 10th Feb 2015. And also noticeably there is a gap below 8427 which remains open since 15th Jan 2015.
Nifty Daily charts shows that very recently 10 day auto correlation turned positive and the smooth RSI oscillator indicates trend strength is accelerating. And hourly charts also turned to positional buy trend with hourly supports coming around 8671. One has to exit their long if the autcorrelation turns negative or the Smooth oscillator turn down below 50 on EOD basis.
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Nifty and Bank Nifty hourly charts maintains the downtrend with resistance zone coming around 8366.9 and 19010.9 Trend will reverse to upwards direction if the resistance zone breaks on the hourly charts (on hourly basis). It should be noted that last Friday Dowjones ends with a -170 points after two big continuous positive streaks.