- Day trading guide: The underlying uptrend of Nifty remains intact, believe stock market experts
Day trading guide for Monday: Following strong global cues, Dalal Street witnessed sharp upside movement and ended with strong weekly gains. NSE Nifty finished at 17,314 with a weekly gain of 1.29 per cent whereas BSE Sensex closed at 58,191, logging weekly gain of 1.33 per cent. Bank Nifty index recorded 1.41 per cent weekly gain after ending at 39,178 levels. In global markets, the Wall Street fell sharply on Friday following a solid US job data for September 2022 that increased the speculations about the US Fed interest rate hike.
According to stock market experts, a small positive candle was formed on the daily chart with upper and lower shadow. Technically, this pattern indicates a formation of high wave type candlestick pattern. Having declined from the hurdle of 17425 levels on Thursday, Nifty forming such high wave pattern indicates minimal negative impact on the market post weakness from the hurdle. Hence, this is also signaling that the market could retest the above said resistance in the short term and eventually the resistance could be broken on the upside.
Day trading strategies for stock market today
Speaking on Nifty technical outlook, Nagaraj Shetti, Technical Research Analyst at HDFC Securities said, "The underlying uptrend of Nifty remains intact. The consolidation movement may be extended in early part of next week and the market could eventually witness sharp upside bounce from the lows by next week. A decisive upside breakout of the hurdle of 17,450 is likely to pull Nifty towards another important resistance of 18,000 to 18,100 levels. Immediate support for NSE Nifty is placed at 17,200 levels."
"Our markets have seen a pullback move from the ‘200 DEMA’ support and have retraced the recent corrective move from 18100 to 17750 by 50 percent. On similar lines, the Bank Nifty index has also completed its 50 percent retracement around Thursday’s high. Now, it would be interesting to see whether the index continues its upside move from current levels or takes a pause again. In our sense, the data are not in support of any significant rally in the short term," said Ruchit Jain, Lead Research at 5paisa.com.
Ruchit Jain went on to add that Nifty 50 index has corrected from the highs of 18,100 primarily when the INR (Indian National Rupee) gave a breakout from the resistance of 80 and depreciated sharply. Now although the Dollar index has cooled off a bit from the highs, the INR has depreciated further and has surpassed well above 82. Also, if we look at the US Bond yields and the Dollar Index, the correction from the high does not signal a reversal of a trend yet and hence, one should keep a close watch on these factors.
On Bank Nifty outlook for today, Mehul Kothari, AVP — Technical Research at Anand Rathi said, "Bank Nifty has retraced exactly 50% of the fall and it also has evening star pattern. Going ahead; a daily close below 38,800 might drag the index back towards 37,500 mark. On the upside; resistance is placed at 39,600 and above that 40,200 levels. The Nifty Bank index might beat the benchmark in case of further pullback or a fresh fall."
Nifty call put option data
"Nifty weekly expiry option chain reflects on PE writers adding more than 80 thousand contracts each at 17000/16500 strikes, with CE writers exposure is at 17500/18000 zones - over a lakh contracts each as well. PCR_OI at 17300 is just 1, which again holds crucial zones for a decisive move ahead," said Shilpa Rout, Derivatives Lead Analyst at Prabhudas Lilladher.
Bank Nifty call put option data
Prabhudas Lilladher expert went on to add, "Bank Nifty weekly expiry option chain reflects on PE writers being active at 39000 strike - overall 70 thousand contracts, followed by 60 thousand contracts at many other strikes. CE writers building resistance at 40000/41000 strikes - each with overall more than 75 thousand contracts, which hints on a strong move again showing up for the index."
0 Comments