NSEI closes above its opening price after recovering from early selling pressure
NIFTY 50 Index (NSEI) Technical Analysis Report for Oct 16, 2020 | by Techniquant Editorial Team
NSEI finished the week -1.27% lower at 11762.45 after gaining INR82.10 (0.7%) today. Trading up to INR59.55 lower after the open, NIFTY 50 managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Wednesday, NSEI actually lost -2.43% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (NSEI as at Oct 16, 2020):
Friday's trading range has been INR121.90 (1.04%), that's below the last trading month's daily average range of INR167.26. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NSEI.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving lower in the prior session, the index managed to close higher but below the previous day's open, forming a bullish Harami Candle.
Prices are trading close to the key technical resistance level at 11794.25 (R1). After having been unable to move lower than 11661.30 in the prior session, the Nifty found buyers again around the same price level today at 11667.85.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 11661.30 where further sell stops could get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Harami Candle" stand out. Its common bullish interpretation has been confirmed for NIFTY 50. Out of 35 times, NSEI closed higher 54.29% 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 62.86% with an average market move of 0.77%.