NSEI closes within prior day's range
NIFTY 50 Index (NSEI) Technical Analysis Report for Oct 21, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, NSEI finished Wednesday at 11937.65 gaining INR40.85 (0.34%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (NSEI as at Oct 21, 2020):
Wednesday's trading range has been INR242.90 (2.03%), that's far above the last trading month's daily average range of INR155.29. 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 higher than usual for NSEI.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, three candlestick patterns are matching today's price action, the Bearish Spinning Top, the Hanging Man and the Bearish High-Wave Candle which are known as bearish patterns. The last time a Hanging Man showed up on July 7th, NSEI lost -0.87% on the following trading day.
After trading down to 11775.75 earlier during the day, the index bounced off the key technical support level at 11794.25 (S1). The failure to close below the support could increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 12022.05 (R1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 12025.45 where further buy stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) above 80" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for NIFTY 50. Out of 277 times, NSEI closed higher 61.01% 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 55.60% with an average market move of 0.29%.