Nifty Daily & Weekly Update 13 Oct 2017. Strong Life Time High Close as Diwali Bonus

Big Picture Oct 13th

Nifty made a new life time high of 10191.9 and with a gain of 71 points, Nifty closed at 10167.45, also a life time high closing. Double dhamaka on the last day of the week. 

Nifty opened gap up and continued to trade above the open through out the day. The volumes were above average. There were some contra indicators in terms of the market breadth and sentiment. The advance decline ratio was 0.84 (1 is neutral, less than 1 means more declines than advances and greater than 1 means more advances than decline). The 52WHiLo was at 79% . Amongst the broad market indices, mid cap closed in red while the rest closed in green. Among the sectoral indices three indices closed in red ... Media, Pharma and FMCG while the rest closed in green, including PSU Banks which has been a drag in the recent past.

While there has been mixed signals, the overall mood continues to be buoyant.



Candle Stick Analysis

Daily

  • A gap up bullish candle closing at lifetime high
  • Above average volumes indicating good participation in the rally
  • The day's range was average indicating good price movement during the day.
  • There is a 3 point lower shadow, which can be ignored. 
  • Selling pressure at the higher levels created an upper shadow of 25 points indicating more work is require to shake off the weaker or short term traders.  
  • With this gap, 10100 will act as a key support for the Index moving 100 points above the psychological 10K level.
  • One can say this shifts the Nifty to the next level,  provided the momentum continues.

Weekly

  • The last three tops that the Nifty attained are very close to each other and seem almost same that I  reduced the period to 3 months to get a zoomed in picture of the candles.
  • The high made in week of 31st July was 10137.85, with a spinning top formation on the weekly chart. The week closed at 10066. Next week saw a swift attack by the bears and it took 5 weeks to recover from this attack. 
  • The next high made in week of 18th Sept was 10178.95 about 41 points higher than the July peak.
  • This was not sustained as the weekly close erased all gains and closed below 10K at 9952.80, creating a bearish engulfing candle at the top. 
  • A bearish week followed leading to the formation of a double bottom.
  • October saw the market in recovery mode and within the first half of the month, Nifty managed to climb a new peak. 
  • The new peak achieved today stands at 10191.1 just 12.15 points higher than the previous peak. While the gain over the previous high is not very significant, the bullish candle gives hope. As seen the prior two highs were conspicuous with the missing bullish candle. 
  • Another encouraging sign is that close for the day and week is near to the peak at 10167.45. Again this was not so in the last two instances in July and Sept. 
  • The fact that the High and Close are both life time highs is a sentimentally great signal that can attract further buying from the retail public.
  • Another follow through bullish week will help confirm the resumption of the bull rally.

Trend and Momentum Analysis

  • The Nifty is trading above all key moving averages. 
  • The gap up opening leap frogging 10100 resistance levels and strong close today has created a window of support at 10100 levels.
  • This can be a good psychological move by the bulls to fuel further rally.
  • The daily and weekly RSI are now bullish setting the stage for the next rally

India Vix and Nifty Options Data

  • The India Vix surprisingly went up for the day by 1.99%.
  • The PCR climbed to 1.60 sort of overbought ranges indicating higher puts versus calls.
  • The PC Volume ratio was 1.14 versus 1.25 yesterday
  • 10000 and 10200 are the support and resistance strike prices respectively.
  • Short covering in the ITM Calls upto 10100 and a long build up on strike prices of 10200 are both bullish activities
  • 2.4 million puts were sold at 10100 strike price and 0.5 million puts at 10000 strike price indicating short build up (bullish)


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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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