NSEI closes above its opening price after recovering from early selling pressure
NIFTY 50 Index (NSEI) Technical Analysis Report for Oct 22, 2020 | by Techniquant Editorial Team
NSEI ended Thursday at 11896.45 losing INR41.20 (-0.35%). Trading up to INR66.55 lower after the open, the stock index managed to reverse during the session as bulls took control ending the day above its opening price. 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 Oct 22, 2020):
Thursday's trading range has been INR116.10 (0.98%), that's slightly below the last trading month's daily average range of INR149.33. 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. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on October 5th, NSEI gained 1.38% on the following trading day.
Prices are trading close to the key technical support level at 11794.25 (S1).
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 nearby swing high at 12018.65 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 11775.75 where further sell stops might get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for NIFTY 50. Out of 622 times, NSEI closed higher 55.31% 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 60.13% with an average market move of 0.49%.