And where is it heading from Oct 07 to Oct 10, 2019?
Nifty opened the gap up with a gain of 74.45 points at 11,388.45 giving new hopes to bulls. however, the negative sentiment driven by Bank frauds, weak global cues were already there. then came RBI August Policy in which GDP growth rate was reduced by 0.8% to 6.1 than the previous forecast. The repo rate cut by 25 bps also did not go well with analysts who were expecting 40 bps cut. these reasons were good enough to give the rein to bears to continue the control and drag Nifty further downwards. It closed at 11,174.75 with a net loss of 139.25 points making a large bearish candle on the daily chart. on the weekly chart, It confirmed the progressing evening star pattern. The DIIs were net buyers with 606.28Cr and FIIs were net sellers with -682.93Cr. Total 11 stocks advanced and 39 declined from the Nifty50 stack.
Friday’s closing at 11,174.75 is below the daily Pivot at 11,313.92 and the weekly Pivot at 11,541.12. Although, the Index is well midway of the descending channel on the daily chart its approaching the lower trend line of the ascending channel. It has got multiple layers of resistance to cap the upside on the daily chart. Breakout from this descending channel is crucial for the up move. Stochastic has entered in oversold zone at 17.61. RSI has further weakened and is at 48.88 while MACD is above zero with a bullish crossover with weakening strength. Nifty has retraced more than 50% of the big up move created by the announcement of FM on 20 September. The market may reverse from the Golden Fibonacci level of 11,061 if it gets strong domestic and international cues to continue its bullish journey.
Nifty’s new resistance levels have shifted downwards 11,197, 11,258, 11301 (38.2% Fib from 26 Oct 2019), 11,350, 11,370 (50% Fib 03 June), 11,418.90 and 11,453 (23% Fib recent high). The support levels can be seen from the Nifty Daily chart at 11,137,11,100 and 11061.65 (61.8% Fib Level from recent high). If Nifty breaks below 11,061 on closing and the sustainable basis on the daily chart it may revisit old low at 10,670 sooner or later. Looking at current immediate support and resistance level for the next trading day seems to be from 11,000 to 11,400.
As per Option Chain data, the trading range of nifty seems to be from 11,000 to 11,700 for this expiry as of now. With such a wide range in options data, the market may witness some volatile swings. New put writing was seen at 10,900, 11,000 levels and call writing was seen at 11,200 and 11,300 shifting support and resistance levels down consistently. Looking at the Open Interest data at various strike rates along with the strike shifting forces indicate the possibility of the next trading range between 11,000 and 11,400. PCR @EOD has decreased to 0.55 from 0.82 which indicates bearishness.
Technical analysis with a sound understanding of the market is the key to trading success, however, sometimes, unexpected (domestic or international) factors make the technical analysis go haywire for a while. Market forces are stronger than our analysis sometimes, and we have to monitor fresh data and new dynamics of the market during trading hours to consistently make money.
We trust the information provided will be helpful in your own analysis of the market and make trading a profitable and better experience. The information has been shared for educational purposes. Please seek your financial adviser’s guidance before trading or investing.
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