NSEI runs into sellers around 12246.70 for the third day in a row
NIFTY 50 Index (NSEI) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NSEI ended the week 0.12% higher at 12113.45 after losing INR61.20 (-0.5%) today. Trading INR56.55 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Tuesday, NSEI actually gained 0.77% on the following trading day. Closing below Thursday's low at 12139.80, NIFTY 50 confirmed its breakout through the prior session low after trading up to INR48.60 below it intraday.
Daily Candlestick Chart (NSEI as at Feb 14, 2020):
Friday's trading range has been INR155.50 (1.28%), that's above the last trading month's daily average range of INR120.11. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for NSEI.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar.
After trading as low as 12091.20 during the day, the stock index found support at the 20-day moving average at 12093.69. The Nifty closed back below the 50-day moving average at 12135.65. The index ran into sellers again today around 12246.70 for the third trading day in a row after having found sellers at 12225.65 in the previous session and at 12231.75 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could accelerate should prices move below the nearby swing low at 11990.75 where further sell stops might get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for NIFTY 50. Out of 549 times, NSEI closed higher 50.09% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 59.93% with an average market move of 0.62%.