And where is it heading this expiry on Sept 26, 2019?
Nifty, after a two-day express rally and a day of consolidation, was taken over by bears since morning. The crucial support of 11,543, as mentioned in previous analysis broke as soon as the market started gap down, by 23 points, at 11564.85. Market remained bearish for the political uncertainty in the US (impeachment of Donald Trump), US-Chino trade worries, sell Off in PSU Banks and profit booking before closing at 11,440.2 with a net loss of 148 points.
The DIIs and FIIs both were net sellers today with a negative impact of 762.48Cr and 342.40 Cr respectively. Total 13 stocks advanced and 37 declined from stack of nifty 50. Nifty made a large bearish candle, after a Doji candle on a daily chart, resembling bearish Belt-Hold. On the weekly chart, it made an inverted hammer another bearish candle.
Today’s closing at 11,440.2 is way below the daily Pivot at 11,594.15, 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 is at 85.17 level and still showing that the market is in the overbought zone. RSI is at 59.85 showing reducing strength of Nifty. MACD is above zero with bullish cross over showing good strength of bulls to march ahead.
Nifty’s resistance levels have shifted downwards 11,453, 11,500, 11,543,11,607.8 (23% Fib from 03 June 2019), and 11,695.4. The support levels can be seen from the Nifty Daily chart at 11,418.9, 11,370 (50% Fib 03 June), 11,350 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 11,300 to 11,600 with a bearish bias. Nifty needs a big push to go above 11,695 for a bullish breakout or below 11,370 it may initiate a downside corrective move towards 11,300.
As per Option Chain data the trading range of nifty seems to be from 11,300 to 11,600 indicating volatility for this expiry. New put writing was seen at 11,400 levels and Put unwinding at lower and higher levels. Meaningful fresh call writing was seen at 11,500 and 11,600, but unwinding at higher levels. Looking at the Open Interest data at various strike rates along with the strike shifting forces indicate the possibility of expiry between 11,350 to 11,550.
PCR @EOD has reduced to 1.26 from 1.45 which still indicates a mild 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.
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