Where is Nifty heading on Feb 17, 2020?
The benchmark Nifty opened 15.5 points up at 12,190.15 with a bullish bias and touched days high at 12,246.70 but witnessed profit booking at a higher level. While Nifty was trying to recover from the sell-out, the decision of Supreme Court, dismissing the plea of telecom majors (Airtel and Vodafone Idea), seeking review of certain directions on recovery of past dues amounting to ₹1.47 lakh crore from telecoms, gave another blow to market pulling it down to days low at 12,091.20. Nifty closed at 12,113.45 with a loss of 61.20 points making a large bearish candle on the daily chart. On the weekly and monthly charts, Nifty formed a Doji candle indicating indecisiveness. Today also Nifty consolidated in the new range of 12,000 to 12,300 with volatility as estimated in our previous analysis. Nifty needs to get back in the new ascending channel again for its northward journey for which it will need strong cues from domestic and international markets.
The DIIs were net buyers with a turnover of 219.54Cr whereas FIIs were net sellers with a turnover of 704.92Cr. A total of 15 stocks advanced and 35 declined from the stack of nifty 50. The closing of Nifty at 12,113.45 is above the 50 DEMA at 12,068 but below the daily Pivot at 12,180. The daily stochastic remains close to the overbought zone at 71 while RSI is at 51 indicating the market may consolidate some more.
Nifty’s new resistance levels are 12,151, 12,190, 12,245 and 12,272 while the support levels are at 12,088, 12,051, 11,990 and 11,953. If Nifty slips below 11,990 level (on a closing basis) may head towards 11,750 to fill up the bullish gap and if it closes above 12,190 it will continue its journey toward 12,430. The next day trading range from the chart seems to be from 12,000 to 12,272.
Bank Nifty was also impacted due to negative news as most banks have got huge loan exposure to telcos. It closed at 30,834.80 with a net loss of 395.45 making a large bearish candle. New resistance levels are at 31,109, 31,281, 31,436 and 31,649 while as key support levels at 30,776, 30,630, 30,390 and 30,235. The Trading range for BN looks between 30,500 to 31,300. Bank Nifty PCR for the current OC series is at 0.53 while PCR for next series is 0.99 which indicates a negative bias with consolidation.
As per Option Chain data (20 Feb), Call writing was seen at 12,100 to 12,400 whereas new Put writing was observed from 11,900 to 12,200 in the new weekly Option series. The resistance and support levels are wide indicating volatility in the next session. Max OI in PE is at 12,000 and CE is at 12,200. The PCR for the current series is at 0.70 and the next series at 1.17 indicating negative bias with consolidation. OI data shows the possibility of the next trading range between 12,000 to 12,200 while 12,000 to 12,500 seems to be a weekly trading range. Traders are advised to be careful and trade with close stops. Coming week watch out for manufacturing PMI (Feb) data of the US, Europe, and Japan for international cues
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!
