NSEI closes within previous day's range
NIFTY 50 Index (NSEI) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NSEI finished the week 0.35% higher at 11504.95 after losing INR11.15 (-0.1%) today. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (NSEI as at Sep 18, 2020):
Friday's trading range has been INR138.00 (1.19%), that's slightly above the last trading month's daily average range of INR133.71. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NSEI.
Despite a strong opening the stock index closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 11446.10 during the day, the index found support at the 20-day moving average at 11470.04. The last time this happened on August 31st, NSEI gained 0.73% on the following trading day. Prices are trading close to the key technical resistance level at 11584.95 (R1). After having been unable to move above 11587.20 in the prior session, NIFTY 50 ran into sellers again around the same price level today, missing to move higher than 11584.10.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 11618.10 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 11383.55 where further sell stops could 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. Although it is usually interpreted as neutral, it has actually shown to be bullish for NIFTY 50. Out of 621 times, NSEI closed higher 54.91% 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 60.39% with an average market move of 0.46%.