And where is Nifty heading on 31 Dec with Option Series expiring on Jan 02, 2020?
The Nifty on Monday opened with a gap up the gain of 29 points at 12,274.9 with a bullish bias. Profit booking around 12,286 which lead to heavy selling leading to the days low at 12,214 which lead to some buying and some short covering taking the nifty to 12,255.85 at the end of the day making a “Hanging Man” candle on daily, weekly and monthly charts. The “Hanging Man” pattern at the distribution zone is seen as a trend reversal candle with a bearish bias. On the daily and monthly chart, Nifty has made higher highs and higher lows which reflect bullishness while as on the weekly chart it has made in-candle which indicates consolidation ahead. The Bollinger Bands were expanding upwards in all the time frames indicating the midterm bullish strength and volatility in the coming sessions. The market remained range-bound in the absence of any fresh cues from domestic and international markets. It will be looking for development on government-initiated growth stimulus for the economy, reduction in LTCG on equity, Individual Tax rate cuts from upcoming Union Budget 2020 on Feb 01, 2020.
The DIIs were net buyers today with a turnover of 201.32 while FIIs were also net sellers with -130.52Cr. Total 33 stocks advanced, 17 declined from the stack of nifty 50. Today’s closing at 12,255 is well above 13 DEMA at 12,166, daily Pivot at 12,207 and weekly pivot at 12,217 showing good strength in Nifty. The Index is still moving within the daily ascending channels. the daily Stochastic is at 53 whereas RSI is bullish at 62 and MACD is above zero with a bullish crossover however with decreasing bullish strength indicating some consolidation.
Nifty’s new resistance levels are 12,275, 12,294, 12,324 and 12,350 while as the support levels are at 12,245, 12,213, 12,184, and 12,157. Looking at current immediate support and resistance level for the next trading day seems to be from 12,184 to 12,324. If Nifty is able to cross 12,294 on the closing basis it will continue it’s up moving towards 12,350 to 12,408. If Nifty slides below 12,184 level on a closing basis, it may initiate a corrective towards 12,117 (38% Fib retracement from 11,832 to 12,294 move).
As per Option Chain data new Put writing was seen at 12,300 & 12,250 whereas Call writing was seen at 12,300, 12,350, 12,400 & 12,500. Max OI in PE is at 12,200 and CE is at 12,300. The Call & Put range has expanded wider which indicates the shifting of support and resistance levels moving apart. OI data shows a possibility of the next trading range between 12,150 to 12,350 with volatility around. The current PCR remains mildly bullish at 1.26 while as ts 1.58 for the next OC series expiring on 9th Jan which indicates bullishness in coming sessions.
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.
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