And where is Nifty heading on Dec 10 with new weekly Option Chain expiring on 12 Dec 2019?
Nifty opened with a small gain of 17.6 points at 11,939.10 and had a bullish bias after touching the days low at 11,888. However, once at day’s high at 11,981.95 profit booking dipped it till the days closing price at 11,937.5 making an indecisive Doji. The Index remained volatile and choppy during the day as expected in our previous analysis. On the weekly chart, Nifty made a bearish “Dark Cloud Cover” indicating the index is still not out of the woods. The market cues can be taken this week from US-China trade talk developments, Fed Policy on 12th Dec and domestic macro data from CPI, IIP, and WPI.
The DIIs, as well as FIIS, were net buyers today with turnover 74.93 Cr and 459.22Cr respectively. Total 29 stocks advanced, and 21 declined from the stack of nifty 50. On the weekly chart, Bollinger Band is still indicating the midterm bullish strength remains in the trend. In 60 minutes, Nifty has reversed from the lower trend line of descending channel towards the upper trend line, hence a pullback till 12,000 (61% Fib retracement from 11,888) can be expected.
Today’s closing at 11,937.50 is below 13 DEMA at 11,990, daily Pivot at 11,955.80, weekly Pivot at 11,982.50. The Index is well above the midway of the daily ascending channel (broader) and has got multiple resistances. Stochastic, at 25.98, has come out of the oversold zone whereas RSI is at 51.51 and MACD is above zero with bearish crossover are indicating some more correction and consolidation.
Nifty’s new resistance levels have shifted upwards to 11,969, 11,994, 12,025, 12,071 and 12,100. The support levels are at 11.900, 11,888, 11,840 and 11,802. Looking at current immediate support and resistance level for the next trading day seems to be from 11,850 to 12,050. Nifty has entered in a short term correction phase and would need strong domestic and international cues to move above 12,050 to continue its journey towards 12,150 and 12,200. If Nifty slides below 11,888 level, it may initiate a downside corrective move towards 11,800 or 11,750 level.
As per Option Chain data new Put writing was seen at lower levels like 11,500, 11,700, 11,800, 11900 and 11,950 whereas heavy call writing at 12,000 level. Unwinding of call was noticed at 12,050 12,100, 12,150, 12,300, and 12,400 levels making resistance weaker, hence Nifty may throw some surprise upwards. The trading range has shifted quite wide indicating volatility in coming trading sessions. 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 11,800 to 12,050. The current PCR of the new option chain series still remains less than 1 at 0.76 and has slightly increased from the previous day’s PCR at 0.62 which indicates bearishness and some more correction on board. If the index moved toward 12,000 some profit booking may start which may further lead to volatility and choppiness in the market. Our stand remains cautious on Nifty and Bank Nifty for intraday trading till they catch a clear trend.
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!
