In the weekly report published on September 20, we said “The bullish momentum will remain intact in the upcoming weeks and the index might move toward the 18,000–18,200 mark in the next few weeks. However, on the flip side, Nifty has support at around 17,350 levels, followed by 17,250 levels.” Today, the Nifty closed at 17,853.20.
The analysis of the daily chart depicts the following:
The index gained around 1.52% this week. It has successfully maintained a higher-top, higher-bottom price forma tion on the weekly chart for the past eight weeks. The chart plotted on the weekly chart is quite bullish and shows no sign of weakness yet. The momentum indicator RSI on the weekly chart is placed at 81 and is trending higher in the bullish zone. It has been maintaining bullishness for the past eight weeks.
Likewise, on the daily chart, the index started the week on a negative note and was trapped in the small intraday consolidation. It touched the low at 17,361, which is close to our support level given on the weekly report. The past four sessions of this week saw a great comeback and brought back optimism to the market. The market has had a V shape recovery and also touched an all-time high of 17,947 for the first time this week. The momentum indicator RSI on the daily chart has accelerated upside and is placed at 78 (which is almost 10 points higher in four trading sessions).
On the options data front, PCR for monthly contracts expiring September 30 stands at 1.12. From the OI data perspective for weekly contracts expiring September 30, maximum Call OI built up was seen for 18,500 strike price, followed by 18,000 strike price, which amounts to 112.99 lakh contracts and 106.02 lakh contracts, respectively. Likewise, maximum Put OI built up was seen for 17,800 strike price, followed by 17,500 strike price, which amounts to 73.65 lakh contracts and 74.50 lakh contracts, respectively.
Further, as per the O’Neil Methodology of market direction, the current market is in a “Confirmed Uptrend” with two distribution days in the last 25 trading sessions.
Summary: All the above-mentioned multi-timeframe technical parameters, along with the O’Neil Methodology of market direction, indicate the index is in a strong bullish trend. All the technical indicators suggest strong momentum, which may accelerate further from the current level. We expect the index may rise beyond the 18,000 mark in the upcoming days. However, it may face some psychological resistance and some profit-booking cannot be denied.
Apart from Nifty50, another key index, the Bank Nifty, is gradually moving toward the 40,000 mark.
FII/ DII Activity in the Second Week of September
Current Status of Major Sectoral Indices - Per O’Neil Methodology
Current Status of Major Global Indices - Per O’Neil Methodology
SWINGTrader India performance chart
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