And where is it heading on this weekly expiry on Oct 10, 2019?
After six declining trading days, Nifty made a strong come back with bullish candle covering loss of the last two sessions. It opened the gap up with a gain of 26.55 points at 11,152.95 and kept on gaining strength after touching days low at 11,090. Govt has been consistently working out on fuelling up the slowing economy by various stimuli since mid-August. Today’s rally was caused by gains in Banking/NBFS, Auto, Metal and Realty sectors along with short covering. Oil prices remained below $ 60, however, the trade uncertainty remains there between the US and China. NIfty closed at 11,313.30 with a net gain of 186.9 points at the end of the day. The DIIs were net buyers with 956.26Cr and FIIs were net sellers with -485.24Cr. Total 38 stocks advanced and 12 declined from the Nifty50 stack.
Today’s closing at 11,313.3 is way above the daily Pivot at 11,157.63, weekly Pivot at 11,295.77 and 200 DEMA at 11,222. The Index has got multiple layers of resistance to cap the upside on the daily and 60 minutes charts. Stochastic has shown cross over in the oversold zone at 18.32. RSI has gained some strength and is at 50.77 while MACD is still above zero with a bullish crossover however, with weakening strength. Nifty has reversed near the golden (61.8% retracement) Fibonacci level but needs strong domestic and international cues to continue its bullish journey towards 11,463 and subsequently 11,695.
Nifty’s new resistance levels have shifted downwards 11,321, 11,350, 11,390, 11,416 and 11,453 (23% Fib recent high). The support levels can be seen from the Nifty Daily chart at 11301 (38.2% Fib from 26 Oct 2019), 11,232, 11,182, 11,137, 11,100, 11061.65 (61.8% Fib Level from recent high) and 11,000. If Nifty breaks below 11,061 on closing and the sustainable basis on the daily chart it may revisit old low at 10,670. Looking at current immediate support and resistance level for the next trading day seems to be from 11,182 to 11,453.
New put writing was seen at 11,200, 11,300 levels and Call unwinding was seen at 11,300,11400 and 11,500 shifting support and resistance levels upside today. some unwinding on the call side is still balance. If the market gets positive cues than coupled with these balance short-coverings markets may move towards 11,453. However, being an expiry day, the market may witness some volatile swings. 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 11,150 and 11,4050. The PCR @EOD has increased to 1.08 from 0.565, which indicates neutral bias.
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 provided will be helpful in your own analysis of the market and make trading a profitable and better experience. The information has been shared for educational purposes. Please seek your financial adviser’s guidance before trading or investing.
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