Nifty Daily Update 25 Oct 2017. Will the Euphoria sustain ?

Big Picture Oct 25th

The bulls took full advantage of the news about Recapitalisation of PSU Banks. This sector which was lagging for a while, rocketed with some of the index scrips gaining massively. Consequently the Index rose sharply by ~88 points to close at 10295. Today was again a life time high and a life time high on closing basis.

The broad market indices were all green with midcap and small caps gaining the most in session today. PSU Banks led the sectoral indices with a huge 29.63% gain on a single day. Most unusual event one would say, even in the stock markets. Pharma and realty sectors were laggards as they ended in red.

The advance decline ratio was 0.79 contrary to the bullish euphoria present in the indices. The 52W HiLO Score was 77% (versus 84% yesterday). Both these indicated stock specific movements and wide participation was missing in the rally today.

Candle Stick Analysis


  • Bearish spinning top at the peak indicating a failure by the bulls to consolidate the strong rally in the PSU Banks.
  • The neutral advance decline ratio in nifty and negative ratio in the overall market indicates selective participation in the rally
  • The high volume and high range shows a very volatile market and supply at higher level continues to flow. 
  • The supply ensured that the Index closed below the open (red candle) i.e. bears succeeding in pushing the price below the open.
  • The close was in the mid of the range indicating neutrality.
  • The index managed 2 life time highs today. A life time high close of 10295.35 and a life time peak of 10340.55.
  • The gap up though only 3 points provides a tiny window of support between 10230-240 levels.
  • Considering the mixed picture that the data presents, a couple of strong follow up days post expiry will provide the confidence of reaching the next target of 10500.

Trend and Momentum Analysis

  • The above chart now has key moving averages plotted as well as the RSI reading.
  • The Index is comfortably above the key moving averages
  • The RSI reading is bullish.

India Vix and Nifty Options Data

  • India Vix closed neutral with a gain of 1.4% to close at  11.76
  • The Put Call Ratio was oversold at 1.82 (Bullish)
  • The trading Put Call Volume stood at 0.99
  • Max Pain shifts from 10100  to 10200 (probable expiry strike price)
  • The Short build up on the put side and long build up on the call side yesterday (as mentioned in my blog yesterday) was a smart manoeuvre by the Bulls to take Nifty closer to 10300. Bears would be hurting in all the different markets thanks to the rally close to the expiry.
  • The support strike price continued at 10000 while the resistance is at 10300. 
  • High levels of unwinding seen at 10100 puts and 10200 calls
  • Short build up at 10250 and 10300 Puts indicates Bulls keen to close expiry above 10250
  • Long build up at 10350 indicates bulls will try and make a new high tomorrow. 

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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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