Nifty 50 – Bank Nifty Chart 5th November – 9th November 2018
Weekly video on Nifty Analysis & Bank Nifty Analysis. In this week’s video on Nifty & Bank Nifty, I have explained why this retracement needs to be considered one day at a time as broader trend is still in question. Both Nifty 50 and Bank Nifty are still below their 200 DMA. I have shown that retracements typically happen till 50% fibonacci level and it is only then that one should start to judge the underlying strength in the market.
I then move to Relative Strength Index (RSI) and show how one can analyse Nifty, Bank Nifty, other NSE India sectors along with key stocks to assess the underlying strength. I draw references from Andrew Cardwell’s RSI concept and show how RSI moves between the 80 – 40 range when underlying structure is bullish and how it moves within the 60-20 range when underlying structure is Bearish. I then explain why I took the current trade in Bank Nifty based on RSI chart.
I then move to drawback of this method and how one can avoid whipsaw trades by simply introducing Price action analysis with RSI. In this, I show that as RSI starts to indicate accumulation through Bullish range, one must confirm the same with Price structure of the underlying Stock or Index.
By doing this, one can identify high probability trades. I have given many examples including that of Nifty, Bank Nifty, FMCG, Media, I.T. and Pharma Index. In the end, I have mentioned Nifty and Bank Nifty key levels along with market breadth chart for the week