BankNifty Update for Jul-07

Banknifty opened Gap up 400+ points and then there was not much of trading opportunity as it was rangebound throughout the day. There is still a possibility of upmove towards 22500/22700, but the daily chart showing a lack of momentum.

It is interesting to observe that Banknifty did not break the top made on Jun-24 @ 22479 though Nifty-50 made a new top. So there is a divergence in Nifty and Banknifty. This is a sign of weakness unless Banknifty catches with Nifty.

Jul-07 is the Gann date (minor time cycle). It will be interesting to watch whether it breaks Jun-24 high and reverse or continue upmove.

The hourly chart shows consolidation after the gap up. Hence, the possibility of further upmove is strong.

FNO Data:

The future OI decreased by 8% with an increase in price. So normal analysis suggests Short covering. But it looks like long unwinding as we saw longs building last 2 days. So we need to be cautious at higher levels.

Trade Plan:

Above 22330 targets are 22450/22550/22700

Below 22120 targets are 21950/21800

I am cautiously Bullish.

Comments

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Nifty Time Cycles

The following chart shows various time cycles on Nifty. What Happened? In 2019, Gann 90 year cycle completed. This cycle comes from 1839 depression followed by 1929 depression. In Feb-2020, 20-year cycle completed from Feb 2000 Top In Jan-2020, 144-month cycle completed from Top made in Jan-2008 before the 2008 financial crisis In Dec-2019, 3-year cycle completed from Low made in Dec-2016 post Demonetisation So we saw a big fall as major cycles came together. What next for Nifty? In Oct-2020, 144-month cycle from Low made in Oct-2008 during the 2008 financial crisis, will complete In Nov-2020, 10-year cycle from Top made in Nov-2010 will complete In Dec-2020, 288-month cycle from Low made in Dec-1996 will complete In Feb-2020, 60-month cycle from Low made in Feb-2016 will complete In Feb-2020, 13-month cycle (it is observed Nifty makes Bottom from Top in 11-13 months) from Top made in Jan-2020 will complete In Sep-2021, 20-year cycle from Low made in Sep-200...

VIX Analysis

The daily VIX chart shows the formation of Doji candles at the bottom and reversal. The daily RSI crossed the previous resistance level of 40. The MACD signal gave bullish crossover suggesting bullish move in VIX. So the daily chart shows the possibility of VIX moving towards 28 levels in the coming days. The weekly chart shows the formation of wedge and reversal from the bottom. VIX may move towards the upper wedge line @ 29-30. So VIX suggesting the bearish mood of the market and hence the high possibility of fall in Nifty-50 and Banknifty in the coming days/weeks. VIX Gann Box: The daily Gann Box shows a reversal from the mid-zone of time factor points. The next time factor date is Jul-21. So will VIX continue to move high till Jul-21 or it will reverse from angle point? Wait and watch. Using VIX to spot Intraday Reversal on Indices: VIX is a very useful indicator to spot reversal during day trade. If the price of an index moves up and @ resistance zone watch values of VIX. If VIX s...

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