And where is Nifty heading on Dec 04 with weekly Option expiring on Dec 05, 2019?
Nifty opened a gap up of 19.45 points at 12,067.65 and witnessed heavy profit-booking by FIIS. We had expected Nifty to be in the range of 11,985 to 12,160 for the intraday trade. Nifty closed at 11,994.2 just below the crucial 13DEMA at 12,004 after visiting the day’s low at 11,956.40. Nifty made Lower Low and Lower highs for the last three consecutive days.
The DIIs were net buyers with 963.97 Cr and FIIs were net sellers with -1131.12Cr. Total 11 stocks advanced, and 39 declined from the stack of nifty 50. Nifty made a Bearish Cadle on the daily chart. On the weekly chart it has made a bearish candle but with expanding Bollinger Band indicating the midterm bullish strength is still there. On 60 minutes, Nifty is at a Lower trend line getting good support and on reversal may move towards 12,160 and 12,200 if able to break out above 12,100 which is a key resistance level at present.
Today’s closing at 11,994.20 is below the daily Pivot at 12,069 but well above the weekly Pivot at 12,044.87 and 200 DEMA at 11,406. The Index is well above the midway of the daily ascending channel and has got multiple resistances near the upper trend line. Stochastic, at 34.38, has come out of the overbought zone whereas RSI is at 56.6 and MACD is above zero with Signal and the MACD line converged.
Nifty’s new resistance levels have shifted upwards to 12,004, 12,029, 12,050, 12,086, 12,100, 12132 and 12,146. The support levels can be seen from the Nifty Daily chart at 11,986, 11,955 and 11,922. Looking at current immediate support and resistance level for the next trading day seems to be from 11,922 to 12,150. The Nifty needs a big tailwind to go above 12,160 for a bullish breakout towards 12,255 or below 11,955 it may initiate a downside corrective move towards 11,900 or 11,855.
As per Option Chain data new Put writing was seen at lower levels like 11,900 and 11,950 and heavy call writing was seen at 12,000,12050, 12,100, 12,150 and 12,200 capping the upside.
Put unwinding was seen at 12,000, 12,050 and 12,100 levels. The trading range seems to be widening now leading to volatility. 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 11,900 to 12,150. The current PCR has reduced to 0.80 from 1.03 which indicates correction and bearishness. if the index moved toward 12,150 some profit booking will start which may lead to volatility and choppiness in 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.
Happy Trading and Keep investing safely!
