And where is Nifty heading on Dec 13 with new weekly Option series expiring on Dec 19, 2019?
Today, Nifty opened with a good gain of 34.15 points at 11,944.30 and had a continuous bullish pressure. It remained range-bound till 2 pm wherein a fresh buying and short-covering were witnessed taking the index to days high at 12,005.5. The index could not hold 12,000 level due to profit booking and closed at 11,971.80 with a net gain of 61.65 making a bullish candle on the daily chart. On the weekly chart, Index made a bullish hammer pattern where Bollinger Band still indicating the midterm bullish strength in the trend. In 60 minutes, Nifty has touched the lower trend line of the descending channel and reversed gaining a 50 % Fib level in the pullback move of today. It needs to re-enter the ascending channel again and close above 12,035 to continue its bullish journey. Although Nifty is still not out of the woods, however, the midterm bullish bias is still there as per technical charts and indicators. Thanks to the dovish tone of the Fed to keep all the markets up today. The market will need good cues from domestic and international markets.
The DIIs were net buyers today with 810.23Cr while FIIs were net sellers with 683.83Cr. Total 37 stocks advanced, and 13 declined from the stack of nifty 50 showing the index structure as strong. Today’s closing at 11,971.80 is above 13 DEMA at 11,963, daily Pivot at 11,888.55 and weekly pivot at 11,982. The Index is still well above the midway of the daily ascending channel (broader) and has got multiple resistances. Stochastic, at 32.8 is still around the oversold zone whereas RSI strengthened to 53.78 and MACD is above zero with bearish crossover are indicating some more correction and consolidation on board for Nifty.
Nifty’s new resistance levels have shifted upwards to 12,005, 12,034, 12,056, 12,081, and 12,114. The support levels are at 11.957, 11,934, 11,910, 11,888, 11,844 and 11,832, 11,802. Looking at current immediate support and resistance level for the next trading day seems to be from 11,844 to 12,056. Nifty has entered a pullback move which can lead it to leg 4 of the Elliott Wave above 12,056 on closing basis for which Nifty would need strong cues to continue its journey towards 12,150 and 12,200. If Nifty slides below 11,844 level on a closing basis, it may initiate a downside corrective move towards 11,750 level.
As per Option Chain data new Put writing was seen at higher levels like 11,900, 11,950 and 12,000 whereas call writing was seen above 12,000 levels shifting support and resistance levels upside. The trading range has shifted quite wide in new options series expiring 19 Dec 2019, indicating volatility in coming trading sessions. Looking at the Open Interest data there is a good possibility of the next trading range between 11,850 to 12,050. The PCR of this option chain series is 1.32 at present which indicates mild bullishness. If the index moved toward 12,000 to 12,050 some profit booking may start by FIIs due to long Christmas vacation which may further lead to volatility.
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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