Nifty Daily Update 10th Oct 2017: One more narrow range day.

Big Picture Oct 10th

Market traded in a narrow but green range above yesterday's close. It closed above 10016.95 gaining 28.2 points over yesterday's closed.

The advance decline ratio was 1.45 while HiLo score was 81.54% - an increase from the 75% score of yesterday. Market sentiments was positive as all broad market indices closed in the green. Apart from Realty and FMCG other sectors closed in green.



Candle Stick Analysis

  • The day witnessed another narrow range, in fact the narrowest range since July 2017. 
  • In addition the open and close were just 3 points away creating a doji for a second day in a row.
  • The below average range and doji formation indicates on a below average volume of 8055 crores indicate that smart money has been steadily supplying meeting all the demand that came from the retail public or domestic institutions.
  • A gap up opening and trading above yesterday's close was clearly an invitation to pass on the positions to the weaker hands. 
  • My reading of the market is that the first two days of the current week is a trap for retail investors to join the party, masking the underlying tone of weakness. 
  • After two narrow range days, we can expect some big movement in the remaining part of the week. As mentioned, today's candle was not just a narrow range of last 7 days but of the last 60+ trading sessions. So a break out or break down is in the horizon.

Trend and Momentum Analysis 

  • The close above 10K and trading above previous close and 10K though out the day is a psychological boost for the retail participant.
  • Technically speaking, the Nifty is trading above all key moving averages of 10, 20, 50, 100, 200 days.
  • It is trading close to the 5 day moving average indicating a neutral rather than bullish sentiment. This market indecisiveness at the top of the current rally is also depicted by the 2 doji candles (see chart above).
  • The daily RSI is slowly building up and is now above 50, considered to be bullish.
  • The weekly RSI has bounced back nicely and is clearly bullish ranging above 60.

India Vix and Nifty Options Data

  • India Vix fell by 2.46% indicating bullish activity in the Nifty options market
  • The Nifty PCR Ratio for Oct Series stands at 1.14 (normal)
  • Put volumes stood at 593K and call volumes at 583K close to par.
  • 9800 and 10000 continue to be the support and resistance strike prices based on Outstanding OI
  • Interestingly about 188K short build up was seen in the 10000 call strike though Nifty opened above 10K and traded above 10K through out the day. 
  • Unless there is a shifting of the resistance to a higher number, the presumption would be that the Index will correct once the smart money pulls the trigger. 

Outlook for next trading session

Nifty range for 11th Oct 9960 to 10074 with support at 9931 and resistance at 10104
Bank Nifty Range for 11th Oct 24242 to 24397 with support at 24087 and resistance at resistance at 24485

Stay Connected :


If you wish to participate in a discussion on this blog, please join the Facebook Group

 If you wish to learn more about my training programs you can find the details in this link.

If you wish to learn more about my thoughts on financial freedom, check this blog out.

Remember, after all, Financial Freedom is a mindset first !!!

Thank you for reading the Blog and Stay Tuned in.

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.

Comments

Post a Comment

Popular posts from this blog

Learning Byte 10 Steps before I trade a Breakout

#Learningbyte Breakout scrips method: I use the chart ink scanner to filter the long list of scrips making new highs (52W/ATH) The filters contain  technical conditions (RSI, Volume, MA etc.,) as well as fundamental conditions (Market cap, book value etc.,) Let us call this the First List My posts on Breakout scrips started from 8th Dec I have maintained a master list of scrips from the scanner filter. Next step, all repeats (i.e. scrips which are already part of the breakout from 8th Dec) are excluded and only those appearing for the first time from 8th Dec are included. Let us call this the Second List. This Second List is then further filtered on Quality and Fin Trend (predominantly using Markets Mojo). Let us call this the Third List. Only those which pass the above test (2 Green dots) are then posted on my Facebook page This is the short List. I collect certain details like Rise in last 1 week, market cap, sector, shareholding, PEG Ratio etc. that ...
Read more

Nifty Daily and Weekly Update. 27 Oct 2017

Image
Big Picture Oct 27th A failed attempt to close at another life time high. The market opened near the high of the day and traded generally in the green (above prior day close). However, the bears unleashed an evening attack and hammered the Index in the last one hour. Consequently the Index lost 20 points. While the index created a new life time high, the evening attack meant that it failed to create a life high on a closing basis. The broad market indices was neutral to negative as most indices closed in the red. Mid cap 100 closed with zero gains while small cap and next 50 gained. PSU Banks lead the loss making sectoral indices followed by Bank Nifty. Pharma and Media were top two gainers. The advance decline ratio was positive at 1.09 while the HiLo Score was also positive at 84.35% versus a 13 day average of 78.93%. Candle Stick Analysis Daily The daily candle was a bearish piercing candle. The body of the current candle pierced the body of the prior day ...
Read more

Investing Lessons from MOSL 23rd wealth creation study

Image
MY LEARNINGS FROM MOSL 23rd Wealth Creation Study Based on the Video (See link at the end)       LESSON 1 Buy only when the RoE is greater than the cost of capital. MOSL Assumes cost of capital to be 13%   My notes : The cost of capital for most companies can be assumed to be 12 to 15% based on their credit rating. The cost of capital for NBFCs could be 8 to 10% The cost of capital for Banks could be 6 to 8% Check the latest investor presentation or annual report to get this data. But a 13% filter on ROE will help to weed out most of the companies and provide you with a list of companies that is worth spending more time on. Some sectors like Infra have a RoE of less than 10%. So the big question is whether it is even worth looking at these for investment portfolio.    Lesson 2 Assuming the RoE test is passed and we have companies which we feel has a reasonable growth prospects (i.e. RoE > 13% or cost of capital) ...
Read more