#GetSmartWithKEEV Newsletter Vol 1: Insights on Index for the upcoming week

#GetSmartWithKEEV Newsletter Vol 1: Insights on Index for the upcoming week

                              

Index Insights: KEEV

Key highlights of the week:

  • The markets after a consolidation phase is seeing a strong bull run.
  • India's GDP grows 7.6% in September quarter, beats RBI estimates
  • Ultratech decided to buy Kesoram Industries Ltd cement for ₹5379 crore.
  • Indian Defence Acquisition Council (DAC) has approved the proposal for the procurement of Rs. 2.23 lakh crore defence equipment.



The chart above shows a good upward momentum from near 18800 levels then a consolidation around 19875 levels followed by a strong resistance breakout, the OI data given shows strong Put OI at 20000 levels, corresponding with the good upward momentum on chart, 20000 is also the highest Put OI, meaning the put option writers are not expecting Nifty to close below 20000 for this expiry at least. A clear chart trend is visible, showing a bullish sentiment on charts but the same is not supported by the OI data which shows a large range of 20000-21000 (Max Put OI and Call OI), which may be broken this expiry if the spot moves outside the range mentioned. The index has also confirmed an important breakout from near 19875, if maintained then can see a short reversal from these levels again.

It is important to note that the Call and Put sellers don't have a similar OI structure, the put sellers are more active, indicating a bullish expiry if these levels are breached.

Banknifty Analysis


The chart above, when compared to Nifty exhibits a similar structure, its a downtrend followed by a period of reversal. Also, it does confirm the breakout from an important resistance near 44800 and 44700 levels. Notably, 44500 shows highest Put OI as seen in the open interest chart. The OI range is currently small, (44500-45000) indicating volatility is to be expected if the mentioned levels are broken. The 44800 Calls and Puts saw a significant increase in the last couple of hours of trading on Monday. Additionally, on chart it can be seen that the short term trend is bullish and the price needs to be set to run through the important level of 45000 for trend continuation.

Sector Analysis


RRG charts show the relative strength and momentum of a group of stocks against the benchmark index.

In our look at Relative Rotation Graphs®, we compared various sectors against NIFTY 50 Index with the daily closing data of the past week. 

Nifty Metal and Nifty Energy ended the week in the Leading quadrant and working through the Improving and the Lagging quadrant through the week, this indicates a strong closing and a high possibility of trend continuation at least in the short term. Nifty Pharma and Nifty IT are currently around the Improving quadrant which means that their strength is not as strong as the index but they have high momentum, we need to wait to see how these sectors perform over the short term.

Important Note: RRG charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY50 Index (Broader Markets) and should not be used directly as buy or sell signals independently.

 
Analysis provided by:
   Rutveek Shah
Based on the provided information, traders can leverage these findings to optimize their approach towards trading this expiry on KEEV.

Join us for a FREE LIVE session on “'Managed' Strategies with KEEV” by Mr. Monil Shah, Founder & CEO of KEEV
Webinar Details -
  Language : Hindi & English
 Date : Wednesday,  06th December 2023
  Time : 4:30 PM

Register Now  - https://us06web.zoom.us/meeting/register/tZckdO6uqzsuE90WuEdF1tebaFmbwO_6Hapr
 

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