NSEI runs into sellers again around 9149.60
NIFTY 50 Index (NSEI) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
NSEI finished the week -1.07% lower at 9039.25 after losing INR67.00 (-0.74%) today. Trading INR81.70 higher after the open, the stock index 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 2.11% on the following trading day. Closing below Thursday's low at 9056.10, the index confirmed its breakout through the prior session low after trading up to INR87.55 below it intraday.
Daily Candlestick Chart (NSEI as at May 22, 2020):
Friday's trading range has been INR181.05 (2.0%), that's slightly below the last trading month's daily average range of INR189.39. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NSEI.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns.
Prices are trading close to the key technical resistance level at 9178.55 (R1). After having been unable to move above 9178.55 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 9149.60.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 9178.55 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 8806.75 where further sell stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for NIFTY 50. Out of 625 times, NSEI closed higher 54.88% 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 59.84% with an average market move of 0.43%.