28th november 2021
TRANSCRIPT
28th November 2021Featured below is the P&F chart of the Nifty 50 index plotted using 0.10% box size
We have mentioned in the past few weeks that the Nifty 50 setup is bearish, and one needs tobe cautious on the long side. There is no change in this view. The setup in the Nifty 50 remainsbearish because the pattern is bearish (DBS) and the price is trading below the 10-columnSMA. The support mentioned last week was breached, resulting in a sharp slide in Nifty 50. Theprice chart suggests the possibility of more weakness in the coming days because of thebearish price pattern and PMOX being in a bearish momentum.
The support for the Nifty 50 index is at the 16700-16750 zone and the 17550-17600 zone may actas an immediate resistance.
Featured below is the PF-X% breadth chart which captures the percentage of stocks thatare in bullish swing from the Nifty 500 universe.
Have a look at the DT Percent breadth chart of the Nifty 500 index displayed below.
Both the breadth indicators are in the extreme zone. Both breadth indicators is showingdivergence with the extreme zone. In the near term, if the price is not able to hold majorsupport we can expect more downside.
Here is the chart capturing the price action of the stocks from the Nifty 50 basket.
Last week, the number of bullish stocks was 36%, stocks in bullishswing breakout were 12%, stocks in bullish momentum were 0%and 6 % stocks were in bearish momentum. There is a cleardeterioration in the breadth with bearish stocks dominating thescene.
The charts displayed below capture the performance of major asset classes against Nifty.
As is evident, the Nifty 50 index has been underperforming other asset classes such as thecurrency and debt market since the last few weeks. This is a cause of concern for the equitymarkets. The outperformance of other assets class continues against Nifty, suggesting the casefor more weakness for equity markets.
Nifty Bank / Nifty 50 Ratio Chart
Have a look at the ratio chart of the Nifty Bank index versus Nifty 50. Last week the Ratio ofNifty bank/Nifty 50 was falling which indicated underperformance of Nifty bank. Also, the ratioline has now breached a key up sloping trendline which indicates that the underperformanceof Nifty Bank may continue in the coming weeks.
Have a look at the Bank Nifty futures short-term chart (1-min, 0.15% x 3) featured below.
The Bank Nifty index is still struggling to breakout above the downsloping 45-degree trendline.This is a cause of concern and unless this breakout happens, it would be difficult for Bank Niftyto scale higher levels. Last week we mentioned an open downside count of 37,238. This verticalcount target has now been achieved. For this week another cluster of count is open asmentioned on the above chart.
The immediate support for Bank Nifty is at the 35,300-35,400 zone and the 37,800-37,900 zonemay act as a resistance zone.
D Sectors
Bullish Sector: Nifty Energy, Nifty Pharma and Nifty Serv Sector.
Bearish Sector: Nifty Realty, Nifty Metal and Nifty Commodities.
CHART IDEAS
Bearish continuation breakout in DEEPAKNTR
Current formation on Point and Figure chart is FT of bearish ABC with Bearish T20. Pattern willfail above 2160.
Series of bearish candle ATUL
The current formation on Point and figure chart is bearish broadening with a series of bearishAnchor column. The dominance of “O” shows underperformance in this counter. The patternwill fail above 8455.
Bearish breakout in JUBLFOOD
The current formation on the P&F chart is bearish ABC. Also on Hekin-Ashi chart price isforming Open=High it indicates bearish momentum and the PMOX indicator also indicating abearish momentum. The pattern will fail above 3750.
Sign of outperformance WELCORP
The current formation on the P&F chart is a continuation FT of bullish ABC. Also, the price hadtaken support near Anchor point. On the Candlestick chart series of the bullish candle withabove average volume indicates bullish momentum. The pattern will fail below 150.
Bullish continuation breakout ELGIQUIP
The current formation on Point and figure chart is Bullish continuation breakout. Also on theLine chart after consolidation price has given breakout with strong volume it shows bullishmomentum. The pattern will fail below 220.
Raju Ranjan
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This Tweet Makes Sense!
I read this tweet recently and realised that it makes so much sense. It is a simple and mostpowerful message. https://twitter.com/laurensbensdorp/status/1463650496472887302?s=20.Here is the screenshot of the message just in case you do not have access to the internet.
I have been talking about these concepts in various webinars and newsletters and felt thatthere is nothing wrong with reinforcing these concepts. If you are someone who is still lookingfor new concepts, fresh scanners or feel unhappy with your approach, then it is a clear signthat you need to work with a few or all of the concepts mentioned above.
Let me give you an example. As a kid, most of us would not have realised the importance ofbrushing our teeth and when our parents force us to do it, we might have felt lazy or mightend up doing it grudgingly.
But once you grow up, I am sure none of us needs any prompting from parents or spouse tobrush our teeth. Irrespective of where you are and what you are doing, brushing the teeth (atleast once a day) has been a habit. Ask yourself how this happened. You were not enjoying thisactivity as a kid but now it has become sort of second nature.
The point here is that you have now realised the importance of this activity and you realise itsbenefit as well. So, this activity happens automatically now. The same concept is relevant totrading too.
Once you identify the above three concepts relevant to you and develop methods to suit theseaspects, then trading gets into auto-pilot mode. You will stop looking around for fresh ideas orconcepts because you have discovered your sweet spot.
Until you discover this, you are not going to feel settled as a trader. Just look at successfultraders in our Telegram channel. They stick to a particular method and trade it. They will not
keep sharing multiple methods or concepts. The key here is they have already addressed the 3points mentioned above.
It is now your turn to do the same. If you are not sure, talk to others who are successful intrading, and they can help you in this aspect.
B.Krishnakumar
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