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Nifty forms bullish candle ahead of F&O expiry, tread with caution

The Nifty50 managed to recoup morning losses in last couple of hours of trade and closed sharply higher on Wednesday, driven by short covering ahead of expiry of December futures & options contracts on Thursday.

The index snapped three-day losses and formed bullish candle on the daily charts, which resembles a Piercing Line kind of pattern.

The strong rally seen in the index took shape of a Piercing pattern which signals a temporary halt to the downtrend. The pattern is formed by two consecutive candlesticks.

The first candlestick is a strong red candle or a bearish candle which is followed by a green or a bullish candle. The bullish candle should cover at least half of the previous day’s red or bearish candle. It is a potential signal for a reversal.

The Nifty50 after opening lower at 10,635.45 (following weak global cues on growth concerns) hit an intraday low of 10,534.55, but managed to recoup losses in last couple of hours of trade and touched a day's high of 10,747.50 on short covering. The index closed 66.40 points higher at 10,729.90.

"Nifty50 appears to have made a strong recovery on the back of huge short recovering, after retracing around 62 percent of its last leg of rally from the lows of 10,333 levels," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

He said this recovery appears to be primarily supported by financials and infrastructure sectors as no other sectoral index gained more than half a percent and advance:decline ratio also skewed in favour of bears which is a cause for concern.

Hence, at this point in time it can be too early to conclude that correction is over at Wednesday's low of 10,534 and trend has reversed, he added.

He said traders will be better off to wait for atleast one day post expiry session to determine the real strength present in this upmove as Nifty50 is still trading below 200 day moving average.

According to Mazhar, more strength can be expected if the said index sustains above its 200 day moving average whose value is present around 10,770 levels. "Meanwhile traders can shift their focus on stock specific opportunities available."

India VIX remained flattish with the marginal gains of 0.17 percent at 15.92 levels. VIX has to hold below 16 zones to get a bullish momentum else tough fight could be back in the market.

On the option front, maximum Put open interest (OI) was seen at 10,000 followed by 10,500 and 10,700 strikes while maximum Call OI was at 11,000 followed by 10,900 strikes.

Meaningful Put writing was seen at all the immediate strikes from 10,650 to 10,500 which suggests that support is intact while Call unwinding was seen at most of the strikes till 11,000 strikes. Option band signifies a trading range in between 10,600 to 10,800-10,850 zones.

Source:https://www.moneycontrol.com/news/business/markets/technical-view-nifty-forms-bullish-candle-ahead-of-fo-expiry-tread-with-caution-3326781.html

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NCDEX Suppport and Resistance Level

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Sensex plunges 400 points, Nifty around 10,550; crude oil prices near $50/bbl

Market opens It is a negative start on D-Street, with the Sensex falling over 150 points, while the Nifty tested 10,600.

The Sensex is down 155.73 points or 0.44% at 35314.42, while the Nifty is down 51.00 points or 0.48% at 10612.50. The market breadth is negative as 223 shares advanced, against a decline of 259 shares, while 39 shares were unchanged.

All sectoral indices are trading in the red, with maximum cuts visible among automobiles, IT, metals and pharma seeing the most pain. The Nifty Midcap index is almost half a percent lower. 

Asian Paints, Yes Bank, IOC and BPCL were the top gainers, while HUL, Tata Steel, and Hindalco lost the most. 

ASIA UPDATE Global stock markets were heading into the year-end under a heavy cloud after another rout this week as US political uncertainty added to heightened concerns over slowing global economic momentum.

Asian equities were shaky on Wednesday following the plunge in Wall Street on Christmas eve in the face of a series of unnerving US political developments, including a US federal government shutdown and President Donald Trump’s increasingly hostile stance toward the Federal Reserve chairman.

US Treasury Secretary Steven Mnuchin had also raised market concerns by convening a crisis group amid the pullback in stocks.

S&P 500 e-mini futures were effectively flat, pointing toward a subdued start for Wall Street when the US market reopens after Christmas Day, when many of the world’s financial markets were shut.

Source: https://www.moneycontrol.com/news/business/markets/stock-market-live-updates-bse-nse-sensex-plunges-400-points-nifty-around-10550-crude-oil-prices-near-50bbl-3324531.html

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India becomes world's 7th largest stock market by mcap; stocks that could benefit from its rise

India’s healthy economic growth has helped its stock market become the seventh largest market by size, with a market capitalisation (mcap) of $2.08 trillion. Its stock market has overtaken that of Germany, Europe’s largest economy, for the first time in seven years, according to Bloomberg. The US dominates the global ranking, with $27 trillion mcap, followed by China, Japan, Hong Kong, UK, France and India.

India’s economic growth will continue to propel mcap higher

India’s ascent reflects the growing clout of emerging markets. It also indicates its economy is positioned for sustained growth, even if the manufacturing sector is not firing on all cylinders. The BSE Sensex, the broad market benchmark, is up 5 percent in past one year in terms of local currency and down around four percent in US dollar terms, still outperforming MSCI Emerging Market index that declined 17 percent.

Source: https://www.moneycontrol.com/news/business/moneycontrol-research/india-becomes-worlds-7th-largest-stock-market-by-mcap-stocks-that-could-benefit-from-its-rise-3321791.html

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Options data indicates short-term trading range of 10,600-10,900

Nifty has taken resistance from previous swing high and formed shooting star candle which is justifying the selling pressure on higher side around the strong psychological mark of 11,000 and 100-DMA at 10,950.

ADX indicator is trading around 17 mark, which is less than crucial levels considered for a trending market, expresses no strength in current trend on either side suggesting market to take support at a lower level and close the month sideways.

However, weekly RSI is still placed near 50 for the last four weeks indicating sideways to positive momentum intact. Also, looking at market movement since 2001, there is 95% probability that markets will have positive Christmas week.

On the downside, Nifty has strong support from the line of parity around 10,700 and 50-DMA at 10,574. A major unwinding of Put writing and shifting of writing to lower strikes was seen on Friday. Option data suggests an immediate trading range of 10,600 and 10,900.

Bank Nifty

Banking index is trading in rising wedge pattern having lower side support around 26,300 and upper trend line resistance is placed near 27,250 levels. Since Bank Nifty is trading above major moving averages, its short-term & mid-term trend is positive and immediate trading range is 27,250-26,300 levels.

Source:https://www.moneycontrol.com/news/business/markets/options-data-indicates-short-term-trading-range-of-10600-10900-3319041.html

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