Bank Nifty 09 Nov 17

Commentary On Index:

Date : 09 Nov 17 (Weekly Expiry)
Day Stats : Day closed with a gain of 107 points.  
Day: Up Day
Candle pattern:  Neutral Candle.  Long lower and upper shadow with a very miniscule real body creating a DOJI Pattern after two bearish days.  Indicates potential change in sentiment in upcoming session.  
Range: Narrow
Volume:  Low
Notes: Being weekly expiry low volumes is a surprise. The underlying components are all sideways to bearish. The Doji after two days of fall indicates potential consolidation before further down or up move.  


BANK NIFTY COMPONENT STRENGTH SCORE 03 NOV 17*

Component Strength Score : 55.72
EMA : 55.19
Interpretation : Neutral.



*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 bet
      ween 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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