NSEI pushes through key technical resistance level
NIFTY 50 Index (NSEI) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, NSEI finished Wednesday at 11604.55 gaining INR82.75 (0.72%). Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (NSEI as at Sep 16, 2020):
Wednesday's trading range has been INR101.35 (0.88%), that's slightly below the last trading month's daily average range of INR128.77. 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 White Candle which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern.
Buyers managed to take out the key technical resistance level at 11584.95 (now S1), which is likely to act as support going forward. The last time this happened on July 28th, NSEI actually lost -0.86% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Further buying might move prices higher should the market test August's nearby high at 11794.25.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Resistance R1" stand out. Its common bullish interpretation has been confirmed for NIFTY 50. Out of 196 times, NSEI closed higher 62.24% 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 60.71% with an average market move of 0.65%.