And where is Nifty heading on 03 Jan with new Option Series expiring on Jan 09, 2020?
The Nifty opened with a gap up of 16 points at 12,198.55 and maintained bullish bias through the day closing at 12,282.20 with a net gain of 99.70 points making a large bullish Marubozu candle on the daily chart. Today’s market was mainly run up by the MEtal, Infra, and energy sectors. On the weekly chart, Nifty made a Dragonfly Doji candle showing bullish bias. The Bollinger Bands were expanding upwards in all the time frames indicating the midterm bullish strength and volatility in the coming sessions. For the last two weeks, nifty has been consolidating in a range of 12,100 to 12,300 and to continue its bullish journey Nifty needs to sustain above 12,250 on a closing basis, however, the upside is capped due to week macros. The market needs positive development on government-initiated growth stimulus for the economy, reduction in LTCG on equity, Individual Tax rate cuts from the upcoming Union Budget.
The DIIs were net buyers today with a turnover of 63.95 while FIIs were net buyers with 688.76Cr. Total 35 stocks advanced, 15 declined from the stack of nifty 50. Today’s closing at 12,282.20 is well above the 13 DEMA at 12,191.5, daily Pivot at 12,190 and weekly pivot at 12,217 showing good strength in Nifty. The Index is still moving within the daily ascending channels; however, there were divergences observed in the daily chart in Nifty and Bank Nifty. The daily Stochastic is at 54 whereas RSI is at 61.6 and MACD is above zero with a bullish crossover however with decreasing bullish strength indicating some more consolidation.
Nifty’s new resistance levels are 12,293, 12,324, 12,350, and 12,404 while as the support levels are at 12,245, 12,222, 12,198, 12,165 and 12,117. Looking at current immediate support and resistance level for the next trading day seems to be from 12,200 to 12,350. If Nifty is able to cross 12,300 on the closing basis it will continue it’s up moving towards 12,400 to 12,500. If Nifty slides below 12,250 level on a closing basis, it may initiate consolidation or a corrective towards 12,100.
As per Option Chain data new Call writing was seen at 12,300, 12,400, 12,450, and 12,500 level whereas new Put writing was observed at 12,200, 12,250 and 12,300. The unwinding of Calls or puts in new series was not observed. Max OI in PE is at 12,200 and CE is at 12,300. The Call & Put range has shifted on the broader side indicating volatility n. OI data shows the possibility of the next trading range between 12,200 to 12,350. The current PCR is bullish at 1.49 while as its 1.71 for the next OC series expiring on 16th Jan which indicates correction and consolidation to continue for a while.
Technical analysis with a sound understanding of the market is the key to trading success; however, 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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