NSEI closes higher for the 3rd day in a row
NIFTY 50 Index (NSEI) Technical Analysis Report for Oct 20, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, NSEI finished Tuesday at 11896.80 gaining INR23.75 (0.2%). 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 20, 2020):
Tuesday's trading range has been INR112.00 (0.94%), that's below the last trading month's daily average range of INR154.02. 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.
One bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern. The last time a Last Engulfing Top Pattern showed up on October 14th, NSEI lost -2.43% on the following trading day.
After having been unable to move lower than 11820.40 in the previous session, the index found buyers again around the same price level today at 11837.25.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 12025.45 where further buy stops might get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for NIFTY 50. Out of 179 times, NSEI closed higher 58.10% 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 58.10% with an average market move of 0.50%.