Nifty Daily Update 27th Sept 2017. Bears Trim Dragonfly's wings on the way down

BIG PICTURE SEPT 27th

Yesterday's session seemed like the bulls were getting ready to get back into the battle. The first few minutes seemed to confirm the intent of the bulls. But the bears quickly retaliated to push the Nifty into Red and post the news about the surgical attack in the Myanmar border, the bears tightened the grip pushing Nifty below key support levels (See Trend section below).

All broad based indices closed in red with midcap and small caps losing significantly. All sectoral indices also closed in red with PSU banks, Realty and Pharma being top losers.  The advance decline ratio was 1:5.5 with negative bias. There were 18 52 week high and 58 52 week low reinforcing the grip of the bears.

The range for the day was quite wide at 207 points with a high of 9721 and low of 9714.50 indicating high volatility in the trading session. (See candle analysis below).


CANDLE STICK ANALYSIS

  • It was strongly bearish candle with a very smaller upper shadow and lower shadow of 22 points (10.6% of the day's range of 207). 
  • It completely engulfed yesterday's range. 
  • The body was 185 point long starting at 9920 and closing at 9736
  • The candle pattern shows a continuation of the retracement and is close a 100% retracement of upmove from the prior bottom (9686).
  • The next support is at 23% FIB retracement level. 20% already done and another 3% remaining to be completed. 

TREND ANALYSIS

  • With Nifty breaking the 100 Day SMA support, the trend as per my reading can now be classified as a weak uptrend.
  • This uptrend has gained ~2300 points and in the current sell off, it has corrected about 465 points i.e. 20% of the total upmove that started in January.
  • This sell off can be classified as a market correction and sets up the stage for the Nifty to resume the uptrend (if it finds support at 9650 levels which is the next crucial support).
  • 9650 also happens to be a 23% fib retracement level for the current uptrend.
  • A break of 9650 would form a lower low than the previous pivot low of 9686 and encourage bears to come out more boldly as 9700 would become a strong resistance on the way up.

INDIA VIX AND NIFTY OPTIONS DATA 

  •  India vix was up by 7.23% indicating strong bearish activity in the Options Sept series.
  • In the day's session 3.44 million calls were traded while 2,88 million puts were traded.
  • 9700 and 9900 strikeprices now form the support and resistance moving down from yesterday's levels.
  • Calls saw short buildup from 9650 levels indicating high level of bearishness. The maximum OI Change on the call side was at 9800 levels which saw an increase of 2.77 million OI followed by 9750 and 9850 strikes which saw increases of 1.49 million and 1.27 million.
  • Puts saw long build up or long unwinding on key strike prices reinforcing the bearish sentiment.
  • The PCR has fallen further to 0.65 indicating tighter grip of the bears.
  • The max pain for Nifty is at 9800, though there is a high chance that the Nifty may close a couple of strike prices below the max pain.
  • The max pain for Bank Nifty is at 24000. 
OUTLOOK 28th Sept

28th Sept Nifty Range 9731 to 9846 with support at 9650 and resistance at 9900
28th Sept Bank Nifty Range 23751 to 24087 with support at 23527 and resistance at 24200

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Disclaimer :

This blog is for educational and awareness purpose only. The views are intended for discussion and exchange of views rather than an expert opinion. This is not an recommendation to buy or sell or invest in the stock market and derivatives market. Kindly exercise caution and perform your own due diligence before investing in the market, after fully and clearly understanding the risks involved.

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