Nifty Daily Update 23 Oct 2017. Indecisiveness close to Expiry

Big Picture Oct 23rd

The market closed 38.30 points higher than the Diwali trading session. The day saw above average volumes with a range of about 100 points indicating high volatility. The close was positive and just 8 points above the open indicating indecisiveness of the market. 

The advance decline ratio was 0.89 a bearish sign and HiLo percentage of 81.03% which is a positive sign as this % was below 80s for the last 5 regular trading sessions. All marketwide indices closed in the green with midcaps gaining the most at 0.79%.

The sectoral indices presented a mixed bag, with PSU Banks and IT sectors leading the gainers while FMCG and Pharma were top losers. 
       

Candle Stick Analysis


  • A series of spinning tops and doji at the peak indicates a balance of supply and demand and therefore a lack of bullish momentum. 
  • Today's candle has a small body of about 8.2 points and long upper and lower wicks (or shadows). 
  • This is a spinning top (third one from the peak) and with liberal interpretation can be considered as a doji. 
  • The NSE intra-day chart shows the first half belonged to the bears who managed to take the Index below the previous session's close. 
  • The afternoon session saw the buying pressure and this ensured the index closed positive and also above the open, even if marginally so. 
  • The past few days has seen above average volumes .... the last 6 normal trading sessions saw an average turnover of 117460 million INR (i.e. 700000 million INR in total). 
  • While the last three sessions (where the candle formation is a DOJI/Spinning top) accounted for an average turnover of 119140 million INR (i.e. 357446 million INR) slightly above the average of the prior three sessions. 
  • The bulls have absorbed a lot of volume in the last three days and the new expiry will see the stronger camp emerge more clearly.

Trend and Momentum Analysis

  • The Moving averages and the RSI readings are all bullish for the Index.

India Vix and Nifty Options Data

  • The India Vix closed in the red by half a percent (almost neutral).
  • The Put Call Ratio stood at 1.48 (bullish as more puts are being written)
  • The Put Call Volume ratio stood at 1.14 indicating more trades on the put side than the call side.  
  • The max pain stood at 10100 (meaning this has the maximum OI when call and put sides are taken together.
  • 10000 and 10200 continue to be the support and resistance strike prices based on the OI 
  • The day saw a short build up at 10100 put and 10150 and 10250 calls. 
  • The short build up as well as the PCR indicates that bulls will fight for an expiry above 10100. The bears will resist at 10150 and 10250 as per current data.

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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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