And where is it heading this week?
The rally in Nifty took a halt today confirming the consolidation before the next move. The market started at 11,590.7, with a gap down by 9.5 points and remained choppy and range bound before closing at 11,588.2 with a net loss of 12 point on profit-booking by FIIs. The DIIs were the net buyer (472.8Cr) and FIIs became the net sellers (-828.5Cr) today. Total 22 stocks advanced and 28 declined from stack of nifty 50. Nifty made a small Doji candle after a spinning top candle on a daily chart which shows indecisiveness. Nifty has stuck between two Fibonacci levels, daily as well as weekly charts.
Today’s closing at 11,588.2 is just on the daily Pivot at 11,588.8, but well above the weekly Pivot at 11,108.78. Although, the Index is well midway of the ascending channel on the daily chart, however, it has got a stiff resistance at the upper trend line of a descending channel on the daily chart. Breakout from this descending channel is crucial for the up move. Stochastic has already shot up 88.41 showing the market is in the overbought zone. RSI is at 65.19 and MACD line above zero with bullish cross over showing good strength of bulls to march ahead.
Nifty’s resistance levels remain unchanged from yesterday. Resistance levels have shifted drastically upwards 11,607.8 (23% Fib from 03 June 2019), 11,695.4, 11,786.5, 11815, 11,904. The support levels can be seen from Nifty Daily chart at 11,543 (Golden Fib from 03 June), 11,500, 11,475, 11,418.9, 11,370 (50% Fib 03 June) and 11301 (38.2% Fib from 26 Oct 2019).
Looking at current immediate support and resistance level for the next trading day seems to be from 11,400 to 11,800 and weekly range from 11,300 to 11,900 with a bullish bias. As the market has already shot up high and making indecisive candles on a daily and weekly chart it may consolidate for a few days before the next move. Nifty, on closing basis, above 11,695 could be a bullish breakout and below 11,543 it may initiate a downside retracement or corrective move towards 11,370.
As per Option Chain data the trading range today the range of nifty has broadened for the coming week from 11,200 to 12,000 indicating volatility for this expiry. In fact, no new put writing was seen at higher levels i.e. 11,500 and 11,600 and Put unwinding at lower levels was seen. Meaningful fresh call writing was missing a lower levels as well as upside at 11,800 and 12,000. Both factors are indicating the tiredness of bulls and bears. Looking at the Open Interest data at various strike rates along with the strike shifting forces indicate the possibility of higher swings and volatility in the market this week.
PCR @EOD has reduced to 1.45 from 1.56 which still indicates a bullish outlook for the next trading day.
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 then 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 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.
Happy Trading and Keep investing safely!
