And where is Nifty heading this expiry on 23rd October 2019?
Nifty had been at its supply zone with a bearish bias as mentioned in our previous analysis. Today, it started with a gain of 8 points but soon after saw selling pressure and touched days low at 11,554. Some buying pressure at the crucial support 11,553 allowed NIfty to bounce back with the help of PSU Banks, IT and Auto stocks. After touching the days high at 11,651.6 Nifty closed the day with a net gain of 15.75 points. The Index made an indecisive Doji candle with characteristics of Bullish Harami candlestick with lower highs and lower lows on the daily chart but a Bearish Harami on weekly charts. Today, the DIIs were net sellers with -137.38 Cr while FIIs were net sellers with -213.23Cr. From the Nifty50 stack, 30 stocks advanced and 20 declined.
Today’s closing at 11,604.10 is above 61.8% Fib level, below daily Pivot at 11,625.25, above weekly Pivot at 11,535.23 and 200 DEMA at 11,242. The index has entered the Descending Channel yet again and is surrounded by many resistances. Stochastic has cooled down at 64.67. RSI is still bullish at 60.85 while MACD is still above zero with a bullish crossover. Besides the market is in the supply zone at the double top. Nifty needs strong domestic and international cues to continue its bullish journey towards 11,725 and 11,770.
The daily resistance levels are at 11,655, 11,695, 11,725, 11,770 and 11,814. The support levels can be seen from the Nifty Daily chart at 11,600, 11,588 (61.8% Fib of recent High), 11,553, 11,500, and 11,463 (61.8% Fib of recent low). Looking at current immediate support and resistance level for the next trading day seems to be from 11,500 to 11,700.
On the Options side, Put unwinding was seen at lower levels and put writing at upper levels at 11,500 and 11,600. Call writing was seen at 11,600, 11,700, 11800 and 12,000 levels, thus shifting resistance levels. Looking at the Open Interest data the PCR @EOD came down at 0.87 which indicates a mild bearish bias with some consolidation.
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 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!
