Bank Nifty 07 Nov 17

Commentary On Index:

Date: 07 Nov 17
Day Stats : A full bearish candle with a loss of 270.35 points.  
Day: Down Day
Candle pattern:  Triple top based on High of the day.  BN has attempted to break 25696 thrice in as many days. Today, the price rejection was massive. Short upper and lower shadows indicating dominance of supply. Wide range indicates lack of buyers at higher levels.   
Range: Wide
Volume:  Low
     

BANK NIFTY COMPONENT STRENGTH SCORE 03 NOV 17*

Component Strength Score : 55.31
EMA : 55.07
Interpretation : Neutral. EMA has started falling. Another day of EMA fall would indicate reversal of bullish bias. 


BN AT A GLANCE



*ABOUT COMPONENT STRENGTH SCORE

I am experimenting and developing a Component Strength Score based on the study of the underlying constituents of the Index itself. I have started with Bank Nifty. Here is a WIP version.
  • The graph has three data points
    • The movement of BN itself (absolute points),
    • then there is a Component strength (CSS) raw score
    • overlaid with an EMA of the CSS.
  • How to read the Component strength score (CSS)
    • A score of 50 is neutral
    • A score between 51 and 60 is neutral with bullish bias
    • A score above 60 indicates strength in the rally
    • A score between 40 to 49 is neutral with bearish bias
    • A score below 40 indicates weakness (i.e. selling pressure)
    • CSS crossing over the EMA indicates a change in sentiment. As per data, BN getting into a neutral (from bearish) with a positive bias.
  • How to interpret the EMA
    • This a 13 period moving average of the CSS itself.
    • CSS above EMA with EMA above 50 can be considered strength
    • CSS Below EMA with EMA Score below 50 can be considered weakness 
    • A crossover of the CSS and EMA indicates a change of sentiment.

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Disclaimer :


This blog is for educational and awareness purpose only. The views are intended for discussion and exchange of views rather than an expert opinion. This is not an recommendation to buy or sell or invest in the stock market and derivatives market. Kindly exercise caution and perform your own due diligence before investing in the market, after fully and clearly understanding the risks involved.









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