Stock Phoenix’s Nifty analysis for the Month of December – 2019

Fibonacci drawing: High – 5th of July and low which made on the 23rd of August.

Nifty on Fibonacci

We will study the Nifty movement with the help of Fibonacci numbers. It’s one of the moves important and powerful indicators that will help us to arrive at the Targets for the reversal trend. It’s drawn by arriving at the top and bottom of the trend and it’s drawn to arrive at the next set of support and resistance. The higher the Time Frame, the better the results. Here we have taken the Daily charts to draw the Fibonacci Numbers. The drawing remains the same until we get a new high or new low by Nifty. Numbers 38.2% and 61.8% are considered as very crucial in the Fibonacci series.

Nifty Analysis :

As predicted in last month’s blog, Nifty gave a very good bull run after the initial downfall and took support from 11800. And it made a very good move in the last week of the expiry and it broke the previous swing high which was placed at 11981 and it also broke the previous lifetime high and made a new high at 12158.
Since it has broken the 100% Fibonacci levels, It’s time for us to draw a new Fibonacci level. However, we are not drawing the same as we have not got confirmation yet on the trend reversal.

These numbers are valid till we get the reversal confirmation. We will draw a new series of Fibonacci once we break the low of 11981 and travel further downwards.

Currently, Nifty is at the trading above the levels of 100% and targeting for the next extension levels at 12299.

Targets for the Month of December- 2019

As the Nifty is above the important zone of 100.00% and Travelling towards the levels of 123.60%, Now we should wait and see if Nifty sustains the levels of 100% which is 11981 and Travel towards the extension levels at 123.80 and 138.20%. The Targets numbers are clearly defined in the above-embedded picture.

At the same time, the gap between 100% and 61.80% is too high, so we have arrived at the intermediate support with the help of 78.60% and this number comes at 11694. So the upper Nifty has to stay above 11981, If we break these levels, the downside range is very high which is at 11694.

What are the possibilities of Nifty breaking the low or travel upside in the Month of December?

Nifty has broken the lifetime high twice this year. We has seen a sharp recovery in the month of November and Nifty is staying above the Fibonacci levels of 100%. Now the zone 11981 should provide enough support to Index to inch to the higher levels of Target at 12299. However, it all depends on the National and Global scenario.

If we don’t see any news which affects majorly, then we may expect a huge buying coming in from various investors. On the Monthly expiry, Nifty is bull bullish mode and it was a support to hit the high levels, At the same time if we ended up in Global negative news, then that trigger sell-off and most counters and we will end in the red. now we will have a small halt on the rally and we may see a little bit of correction and upside is confirmed only when we break the high which was made on 28th of November.

Even though the Fibonacci numbers are very accurate, the Fibonacci analysis does not tell anything about the timeline to achieving the targets. For the time frame, we have to take the help of the Nifty Option chain. The near term target can arrive with the help of the Option chain.

Weekly Expiry – 05th of December

Yesterday is the first day of the month and we cannot arrive at the exact target for Index. However, we can arrive at the overall picture with the help of Option chain writing. Looking at the option chain, we can arrive at the below inference.

We can see a good amount of support is getting built in the zone of 12000. Hence these levels will act as support for the first-week expiry. At the same time, we could also see that resistance is getting built at the levels of 12100. So the index is expected between 12000 and 12100 on the expiry. The overall PCR ratio is showing bullish sentiment. Now we have to see if Index holds 11981 on the 1st week of expiry. And we may even see a consolidation phase and Option premium decay twill start as the support and resistance range is 100 points. Now we should wait and watch as to how the market will react to the news which occurred on the weekend on the GDP news. Stay tuned with Stock Phoenix Telegram Channel for more live updates.

Monthly Expiry

It’s too early to predict on Monthly Expiry. The overall PCR ratio suggests neutral to Bullish. As of now, we could see strong support is getting built up at the zones of 12000 and 12100. And the good part is, we don’t see any major resistance seen till the levels of 12500. Looks like New lifetime high will be made and we will hit the extension levels of 123.60%. On the charts and the Option chain, we are seeing good support at 12000. Breaking the high of 28th of November high will lead to one more record high. We will get more clarity overall once we pass on the first week of Expiry.

Immediate Target and resistance

  • Upside Targets: 12158, 12299 and 12495 (Above 11981).
  • Downside Targets: 11981, 11800 and 11691 (Below 12158)
News that will affect the Nifty Movement

As you are aware that we are on the series of news is coming from the Central government and for sure all those will hit a positive sentiment in the market. The Inflow has started from FII since the last two months, We have to wait and watch as when the inflow will continue by FII for the month of December as well. The downward journey of Auto Sectors is had halted and we have seen some recovery in few counters. PSU bank yet to show the upside movement. The pharma sector has beaten up badly and we saw some recovery in the month of November as well. Housing Finance Companies are also on the recovery mode.We should watch as to how the month of november for these companies. So overall we are eyeing at the upside move ahead after a small consolidation.

Conclusion form Stock Phoenix :

We see Index taking pause at this phase and stay on consolidation mode or a small correction in the near term and expecting the index to break the high and travel towards one more lifetime high. Recovery for the small-cap and Mid Cap is still due. Let’s wait and how and what market shows ahead for us. Play safe on the intraday and avoid carry forwarding any kind of option for the next day. And we have a very good time on the Small Cap and Mid Caps on the investment side. Almost all the small-cap and mid-caps halted the downtrend. And it is a good sign that we can get very good stocks at an attractive price. As already index is close to the lifetime high, the recovery of Mid Cap and Small-cap is long due.

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