And where is Nifty heading on 18 Dec with Option series expiring on Dec 19, 2019?
Nifty continued its bullish journey with a gain of 28.5 points on a gap-up move at 12,082.45. It maintained its bullish bias till it hit some profit booking at daily resistance level 12,158 which dampened the spirit for a few hours. We had mentioned this level for profit booking in our previous analysis where we had expected a range-bound move between 11,971 to 12,158. Positive global cues gave extra thrust and Nifty saw an all-time high of 12,182.45 before closing at 12,165 with a net gain of 111.05 points at the end of the day making a bullish candle on the daily chart. On a weekly chart, it made a bullish hammer and on the monthly “DragonFly Doji” where Bollinger Band is expanding upwards in all the time frames indicating the midterm bullish strength. The market will need continuous positive cues from domestic and international markets to continue its bullish journey.
The DIIs were net sellers today with a negative turnover of 908.16Cr while FIIs were net buyers with 1,248.47r. Total 39 stocks advanced, and 11 declined from the stack of nifty 50. Today’s closing at 12,165 is above 13 DEMA at 10,016, daily Pivot at 12,078.3 and weekly pivot at 12005.95. The Index is quietly sailing within the daily ascending channels. Stochastic, at 87.9 (overbought zone) whereas RSI has strengthened to 62.99 and MACD is above zero with bearish crossover but increasing bullish strength indicating some bullish bias in Nifty.
Nifty’s new resistance levels have shifted upwards to 12,188, 12,209, 12,245, 12,255, and 12,345. The support levels are at 12,158, 12,145, 12,134, 12,100,12,082 and 12,052. Looking at current immediate support and resistance level for the next trading day seems to be from 12,082 to 12,245. Nifty has completed the pullback move (Wave 4) which now can lead it to Leg 5 of the Elliott Wave if NIfty continues to sustain above 12,158 on closing basis for which Nifty would need strong cues to continue its journey towards 12,255 and 12,350. If Nifty slides below 12,050 level on a closing basis, it may initiate a corrective before resuming it’s up moving towards 12,255.
As per Option Chain data new Put writing was seen at higher levels like 12,000, 12,100,12,150 and 12,200 whereas small Call writing was seen at 12,250 and 12,300 making resistance weak and levels shifting support and resistance levels upside. The unwinding of Calls was across all strikes from 12,000 to 12,200 and Put unwinding at lower levels at 11,850 and 11,950 indicating strong support base on upper levels. OI data shows a possibility of the next trading range between 12,050 to 12,250 having capped upside. The weekly trading range seems to be broader from 12,000 to 12,324. The PCR, today, of current OC series is at 1.70 while as its 1.44 for 26 Dec series OC which indicates bullishness. Profit looking is expected at q2,200 level by FIIs due to the upcoming long Christmas vacation which may further lead to volatility and short term correction/consolidation. The market moves will be affected by the decisions of the GST council, PM’s view on the economy, debt recovery by banks from other NPAs, international cues like the impeachment of Trump, US-China trade deal progress, etc.
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.
Happy Trading and Keep investing safely!
