Market analysis for next week
- Yash Mehta
- May 22, 2021
- 5 min read
In the last week's Market Analysis we have discussed that market was consolidating for last few months and one should be ready for a up or down move based on which side market breaks. Since more sectors were turning positive, we were expecting a breakout above resistance and supply zone and the same thing happened in market this week.
Snapshot of the conclusion of last week analysis.
I won't call this as technical analysis but it is sentimental analysis. In sentiment analysis always check what view retail traders have and the majority of them were bearish for the last few weeks. In the market, big shark has to live, for that small fish will have to become their food. Even we are small fish but we should have some edge so that atleast we can save ourselves and this can happen only if small fish moves in parallel with big shark. This thing will come with experience and practice; no shortcut to this. But I am sharing whatever I am learning and the pre-market homework that I do every weekend.
Now as we have seen a breakout, the trend in Nifty has become positive. But there is always a possibility of failure or fake breakout. So keep your stop losses in system and not in mind.
Nifty is up by 3.4% and BankNifty is up by 7.6% in last week. Also, some of the stocks were shared for short term and their performance in this week was:
Net we made returns of 10.8% or flat in these 5 stocks that were shared.
I have shared detail technical and fundamental analysis of a metal stock in this YouTube video
It is a turnaround story and has a potential of atleast doubling in the medium term.
Some of the major news and events that happened in this week are:
Click on the news and it will redirect you to the article.
Now let's see what can happen in Nifty, BankNifty and broader market for next week. Some charts of the constituents are also shared at the end as a bonus for all the readers, so read until the end.
We won't be looking at weekly chart as the support is currently far from current market price.
Nifty weekly support is 13600 and BankNifty weekly is 29000.
Nifty
Daily time frame chart:
Nifty daily chart. The previous supply zone in Nifty, which was at 14950 -15050, will now act as a demand zone. New supply zone for Nifty is near all-time high (15450-15440). Although Nifty has come out of minor consolidation but major consolidation is still going on for four months.
Price Action:
From resistance line we have seen a breakout and in the short term, the market sentiments is bullish. One can go long in market by taking position in NiftyBees or in constituents. Target would be around 16380 and stop loss would be 14850.
On daily time frame, Nifty is forming rounded bottom pattern. This happens when price is in uptrend and after that it consolidates for months. After breakout above resistance and all-time high 15431, one can expect uptrend to continue in Nifty.
Currently Nifty is bullish but in the short term it can face resistance at all time high. We can expect this uptrend to continue for upcoming weeks now.
BankNifty
Daily time frame chart:
BankNifty daily chart. The previous supply zone in BankNifty, which was at 34200-34450, will now act as a demand zone. New supply zone for BankNifty is near all-time high (36400-36550).
Price Action:
BankNifty has formed cup and handle pattern and has broken the resistance on last day. Overall, the short-term trend is bullish and one can buy BankBees or Banking stocks. Target in the short term would be 38230 and stop loss would be 32600.
There was one resistance line connecting from an all-time high in BankNifty. It has broken that also and overall it show bullishness in banking stocks.
If you remember last week Nifty Bank, Nifty Pvt Bank and Nifty financial services were positive. So this rally is fueled from the financial space and those will push Nifty or Sensex up. There would be other sectors also that will perform because our economy is linked more towards financial sector and if it outperforms, then other sector will pick up the pace.
Some sectors that are looking good for short term and positional trades are:
Nifty Auto
Nifty Bank
Nifty Fin Service
Nifty PSE
Nifty PSU Bank
Nifty Pvt Bank
Currently, market is bullish and one can use buy on dip opportunities in the short term to buy good stocks among these sectors.
Let's see some chart of Nifty 50 and BankNifty constituents.
City Union Bank (Daily):
CUB giving cup and handle breakout above supply zone. One can add this for short term on dips. Target would be 197 and stop loss 162.
M&M (Daily):
M&M has given breakout and one can look for buy on dip opportunities. Short term target is 945 and stop loss would be 770.
LTI (Daily):
LTI available at low risk buying opportunity. Currently, its trading near demand zone and support trendline. One can start accumulation in LTI for short term or for investment perspective.
HindPetro (Weekly):
There was strong resistance for Hindustan Petrol at 258 and this week it has closed above that resistance line. One can start accumulating it for positional trades and one can expect target of 365 and stop loss 220.
I am sharing these charts only for study purpose. One can track these stocks for short term or long-term perspective. Planned your trade with proper stop loss and target and then take action.
I will share more chart other than this on our YouTube channel and will show to calculate target price and time duration of holding. So you can subscribe to the YouTube channel.
Also, if you have any chart that we can track then share it with us in the comment section.
Conclusion:
Currently, market is looking bullish as it has broken resistance and supply zone. Short-term sentiments is bullish and one can use buy on dips opportunity in short term.
One can master this simple art of Technical Analysis by reading these blogs and practicing daily.
Readers can checkout and read first three blogs of Technical Analysis here:
We will publish fifth blog on Technical Analysis series tomorrow.
Thanks for giving your precious time in reading this blog. I hope I have added value to your market analysis for next week. Like and share with others too if we can create value for others.
Publishing your analysis on public forum is not that easy. If analysis goes wrong, then you will have to hear negative comments of the people. Till now I have shared market analysis in last four weeks and the analysis was precise and worked well. If you like our analysis then just hit the Like that is there at the bottom of the blog so that we will know how many people are finding it more useful in their analysis. It also serves as a motivation for us to share more analysis blogs with our friends.
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