The benchmark Nifty opened gap up with a splendid gain of 98.10 points at 12,090.60 and recovered from the previous two day’s losses. It consolidated in the range of 12,050 to 12,150 during the day with a bullish bias seeing the day’s high at 12,134.70. The Indian markets got a bounce today from Asian pears which cheered the opening of many factories in China after a shut down of one month. To boost the income of the rural sector the cabinet approved a grant of 4460 cr for dairy farming. Nifty closed at 12,125.90 with a net gain of 133.40 points making a Hammer candle on the daily chart with a “Morning Star Pattern”. On the weekly chart, Nifty formed a Doji and on monthly a “Hanging Man” candle, indicating positive bias in the smaller time frame but indecisiveness in the larger time frame. Nifty needs to break the descending channel and enter back in the upper 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 590.12Cr while FIIs were net sellers with a turnover of 190.66Cr. A total of 38 stocks advanced and 12 declined from the stack of nifty 50. The closing of Nifty at 12,125.90 is above the 50 DEMA at 12,067 and the daily Pivot at 11,977. The daily Stochastics is at 31 while RSI is at 52 indicating the market may consolidate some more.
Nifty’s new resistance levels are 12,160, 12,190, 12,219, and 12,246 while the support levels are at 12,090~97, 12,037~48, 12,005, and 11,986. If Nifty slips below 12,000 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 12,005 to 12,190.
Bank Nifty also recovered some losses but remained weaker in comparison with Nifty. It closed at 30,838.20 with a net gain of 275.70 making a bullish Hammer with “Morning Star” Pattern. New resistance levels are at 30,950, 31,115, 31,281, and 31,319 while as key support levels at 30,783, 30,681, 30,517, and 30,390. The Trading range for BN looks between 30,500 to 31,200. Bank Nifty PCR for the current OC series is at 0.83 while PCR for next series is 0.90 which indicates a negative bias with consolidation.
As per Nifty Option Chain data (20 Feb), Call unwinding was seen at 12,000 to 12,300 whereas Put unwinding was observed at lover levels 11,900 & 11,950. Massive Put writing was observed from 12,000 to 12,150 in the current series. The resistance and support levels have moved upwards and are still 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 0.93 and the next series at 1.19 indicating neutral bias with consolidation. OI data shows the possibility of the next trading range between 12,000 to 12,200. Tomorrow is the weekly expiry of Index options so day traders are advised to be careful and trade using options strategy with close stops.
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!
