BANKNIFTY Update 22. 02. 2021

Hello traders!

Hope you all having a great weekend. I have been up during the weekend trying to find some interesting charts and analysis. The banknifty index has been at a very confusing yet and interesting zone. Monitoring the above index chart we have been trying to touch down near previous weeks consolidation zone. There seems to be no admissible reason for me to short from here. So what am I gonna do next? Well I will stay patient and look for opportunities to create a favorable bullish spread around support zone.

BANKNIFTY Resistance Zone - 36430.980/36136.290

Support Zone - 35546.910/35252.220

The structure of the broader market is behaving very similarly to last year, hence it is noteworthy that some of the signals are also virtually the same, in fact suggesting a signal fire of warnings is under way.

For one note the new highs on a negative divergence as in 2020.

Maybe nothing, maybe everything.

Oddly enough, with every opportunity of fiscal and monetary support, $VIX still hasn't managed to fill its Feb 2020 gap despite historic highs and intra-day tight price ranges in equities.

10 year has found resistance at the 2016 lows.

Now coming to an interesting topic:

A rational bubble it’s been called because of the exorbitant amount of liquidity flowing through the system distorting everything. Yet despite all this liquidity this market is behaving in a curious way. It is repeating the same behavior as it did last year before the crash. Except this year it is even more valued and more disconnected from technical's and fundamentals.

Don’t @ me saying I’m calling for a crash, I’m not. But a sizable correction remains very much overdue for this market that still appears impervious to all valuation concerns and remains among the most complacent markets in memory. In 2020 markets didn’t top until the later part of February. In 2000 markets didn’t top until March. 2021 has yet to show its hand.

But hey, maybe it’s different this time, although analyzing the charts above it appears that the more things change the more they stay the same.

Have a great weekend.