The trend would shift in favour of bears if the index breaks below 10,030. The index has to negate its formation of lower highs – lower lows to witness a bounce back move towards 10,250-10,300 levels.
The Nifty which started on a muted note failed to gain momentum and closed at the same level by closing making a ‘Doji’ candle on the daily candlestick charts on Tuesday ahead of Reserve Bank of India’s monetary policy outcome.
A 'Doji' is formed when the index opens and then closes approximately around the same level but remains volatile throughout the day, which is indicated by its long shadows on either side. The body will be insignificant which will appear like a plus sign on the charts.
The Nifty opened at 10,118.25 and closed virtually at the similar level of 10,118.35, thus forming a 'Doji' pattern on Tuesday. It rose to its intraday high of 10,147.95 which made up for the long upper shadow and an intraday low of 10,069.10 which made a long lower shadow.
The index still trades below its crucial short-term moving averages such as 5-DEMA, 10-DEMA, 20-DEMA, and 13-DEMA. Tracking the momentum, the 5-DEMA has moved below 50-DEMA which is a bearish sign.
A Doji is an indecisive pattern and investors should wait for Wednesday’s candle to give more insight into the trend. Formation of Doji, after five days of consolidation, is a positive sign and if the index stays above 10,100-10,150 in the next few sessions, there are chances of a relief rally.
The trend would shift in favour of bears if the index breaks below 10,030. The index has to negate its formation of lower highs–lower lows to witness a bounce back move towards 10,250-10,300 levels.
“The Nifty is poised at a very critical juncture. On an intraday basis we nudged the level of 10,094 which was the immediate low for this market and hence a crucial support level,” Manish Hathiramani, proprietary trader & technical analyst, manishhathiramani.com told Moneycontrol.
“The market was quick to bounce off that point but I do not reckon we are out of the woods yet. It is imperative that this market holds the levels of 10,050, otherwise we can witness a sharp southward movement towards the levels of 9,950 and 9,850,” he said.
India VIX moved up by 1.01 percent at 15. Rising volatility is providing grip to the bears and showing short-term concern for long positions.
We have collated the top ten data points to help you spot profitable trade:
Key Support & Resistance Level for Nifty
The Nifty closed at 10,118.2 on Tuesday. According to Pivot charts, the key support level is placed at 10,075.53, followed by 10,032.87. If the index starts to move higher, key resistance levels to watch out are 10,154.43 and 10,190.67.
The Nifty Bank closed at 25,124.8. Important Pivot level, which will act as crucial support for the index, is placed at 24,958.16, followed by 24,791.53. On the upside, key resistance levels are 25,254.56, followed by 25,384.33.
Call Options Data
Maximum Call open interest (OI) of 62.29 lakh contracts stands at strike price 10,500, which will act as a crucial resistance level for the index in the December series, followed by 10,400, which now holds 46.09 lakh contracts in open interest, and 10,300, which has accumulated 46.09 lakh contracts in OI.
Call writing was seen at strike prices of 10,100 (8.2 lakh contracts were added), followed by 10,200 (7.5 lakh contracts added), and 10,300 which added 6.3 lakh contracts.
Call unwinding was seen at strike price 10,700, which shed 1.7 lakh contracts.
Put Options Data
Maximum Put OI of 80.43 lakh contracts was seen at strike price 10,000, which will act as a crucial base for the index in December series, followed by 10,100, which now holds 35.13 lakh contracts and 10,200 which has now accumulated 32.85 lakh contracts in open interest.
Put writing was seen at strike prices 9,900 (5.65 lakh contracts added) and 9,800, which saw the addition of 5.2 lakh contracts.
Meanwhile, Put Unwinding seen at the strike price of 10,200, which saw shedding of 4.2 lakh contracts, followed by 10,300, which saw 2.1 lakh contracts being shed and 10,400, which saw shedding of 1.47 lakh contracts.
FII & DII Data
Foreign institutional investors (FIIs) sold shares worth Rs 1,470.56 crore, while domestic institutional investors bought shares worth Rs 1,074.39 crore in the Indian equity market.
Stocks with high delivery percentage
High delivery percentage suggests that investors are accepting the delivery of the stock, which means that investors are bullish on the stock.
68 stocks saw long build-up
37 stocks saw short covering
A decrease in open interest along with an increase in price mostly indicates short covering.
83 stocks saw short build-up
An increase in open interest along with a decrease in price mostly indicates short positions being built up.
24 stocks saw long unwinding
Long Unwinding happens when there is a decrease in OI as well as in price.