And where may Nifty be heading on Monday, 11 Nov, with Option Series expiring on 14 Nov 2019?
Nifty opened with a gap down of 25 points at 11,987.15 in the morning, Bulls were able to pull it up to 12,034.15 which is beyond recent high of 12,021.10. However, the news of Moody’s downgrading India’s sovereign outlook and also downgrading 21 large organizations from stable to negative came heavy on the market tumbling it to days low at 11,888.75. Negative outlook on SBI, HDFC Bank, Exim Bank, Hero FinCorp, TCS, Infy, BPCL, NTPC, HUDCO, etc was a big blow to the rising streak of Nifty to lose 103.90 points and forced it to close as 11,908.15, forming a bearish candle on the daily chart. On the weekly chart, Nifty made a Doji indicating indecisiveness among bulls and bears. Surprisingly, on Friday, despite all the negative news FIIs were bullish with buying of 932.2 Cr while DIIs were the net sellers with -584.48Cr. From the Nifty 50 stack, 9 stocks advanced and 41 stocks declined.
Friday’s closing is below daily Pivot at 11,993 but well above weekly Pivot at 11,813.4 and 200 DEMA at 11,307. Stochastic is at 67.7, RSI is at 64.62 (bullish) while MACD is still above zero with a bullish crossover. If the index manages to sustain above 11,945, then we may see its bullish journey towards 12,000 to 12,100. The daily resistance levels are at 11,945, 11,982, 12,005, 12,034 and 12,050 while as support levels are at 11,905, 11,854, 11,814, 11,786 and 11,757 for intraday. Looking at current immediate support and resistance levels the next day trading range seems to be between 11,800 to 12,050.
On the Options side, Put writing was seen at 11,500,11,600,11,800 and some unwinding at 11,900 and 12,000 levels. Call writing was seen at 11,900, 12,000, 12,100, 12,200 and 12,300 levels indicating the shifting of support and resistance levels very wide indicating volatility in the coming session. Looking at the Open Interest data and the PCR at 0.75 the market range seems to be in 11,800 to 12,000 for intraday with some correction and consolidation. Profit booking is expected as NIfty approaches 12,050, which may turn market volatile and choppy in intraday. However, looking at the decisive actions India is taking like verdict by SC on Ayodhya conflict, harmonious environment and the firmness of government in dealing with various issues, the market may take a bullish view ignoring Moody’s negative outlook. The other inputs to impact the market this truncated week are macro data like Retail Inflation, Wholesale Inflation, Industrial Production, Trade Balance, Central Bank Policy of Japan, IIP data of China, etc which will also impact the market.
Technical analysis with a sound understanding of the market is the key to trading success, however, sometimes market forces are stronger than the past analysis. Unexpected (domestic or international) factors make the technical analysis go haywire for a while, hence 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.
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