NSEI closes within previous day's range after lackluster session
NIFTY 50 Index (NSEI) Technical Analysis Report for Oct 23, 2020 | by Techniquant Editorial Team
NSEI finished the week 1.43% higher at 11930.35 after gaining INR33.90 (0.28%) today. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (NSEI as at Oct 23, 2020):
Friday's trading range has been INR65.80 (0.55%), that's far below the last trading month's daily average range of INR141.37. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NSEI. Prices continued to consolidate within a tight trading range between 11775.75 and 12018.65 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern. The last time a Bearish Hikkake Pattern showed up on Monday, NSEI actually gained 0.20% on the following trading day.
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 12018.65 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 11775.75 where further sell stops could get activated.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for NIFTY 50. Out of 95 times, NSEI closed higher 55.79% 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 63.16% with an average market move of 0.53%.