And where is Nifty heading this weekend with a new Weekly Option Series expiring on Oct 24, 2019?
Nifty started the day bullish and tried to break out of 11,464 range but could not succeed. It remained sideways in the first half but rose to 11,586.35 with rapid gains in the second half of the day. The day closed with a healthy gain of 122.35 points with a bullish candle on the daily chart making higher highs and higher lows consistently for the last 5 trading days. Today, surprisingly, the DIIs were net sellers -511.76 while FIIs were net buyers with 1,158.63. From the Nifty50 stack, 35 stocks advanced and 15 declined.
Today’s closing at 11,586 is well above the daily Pivot at 11,452, weekly Pivot at 11,252.70 and 200 DEMA at 11,230. The Index has got multiple layers of resistance to cap the upside on the daily chart. Stochastic has moved up quickly to overbought zone and is at 93.96 thus indicating for consolidation or a small correction. RSI has strengthened and it is at 61.73 while MACD is still above zero with a bearish crossover with bullish strength. Nifty needs strong domestic and international cues to cross 11,596 levels decisively to continue its bullish journey towards 11,655/11,695 and subsequently 11,747.
The daily resistance levels are at 11,596, 11,609, 11,655, and 11,695. The support levels can be seen from the Nifty Daily chart at 11,552, 11,500, 11,463 (61.8% Fib of recent low), 11,414, 11,392, 11,345, 11,321, and 11,300. If Nifty breaks below 11,450 on closing and the sustainable basis on the daily chart, it may consolidate or correct for a while. Looking at current immediate support and resistance level for the next trading day seems to be from 11,450 to 11,695.
New Put writing was seen at higher levels like 11,400, 11,450, 11,500 shifting support base upside. Call writing was seen at 11,500,11600 and 11,700 levels thus shifting resistance levels upside. Also, Option data is a wider range now indicating volatility in the coming week. 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 11,450 and 11,700. The PCR @EOD remains at 1.35 which indicates a mild bullish bias with consolidation.
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 will be helpful in your own analysis of the market and make trading a profitable and better experience. This analysis has been shared for educational purposes. Please seek your financial adviser’s guidance before trading or investing.