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

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 :

Nifty was in a very narrow range for the whole month of September with Negative basis throughout the month. However on the last week, we got a huge breakout in the Index and Nifty moved from 10700 levels to 11400 levels in two days on the basis on the positive news which we have got. Post the huge rally Nifty started consolidating and trying to slide slowly on a daily basis. The Fibonacci levels which we are drawn in the last month itself hold good for the Month of October as well. However, I have added one more Fibonacci level which is 78.50%. The index showed a good sign of reversal on the last week and this reversal came exactly for the swing low and the swing low levels are respected. This drawing remains the same as long as we do not break the low of 10637 and high of 11981.

Currently Nifty is at the levels above 61.80%. Do remember that this is one of the important Fibonacci Level.

Targets for the Month of October – 2019

As we now arrived at a support zone of 61.80% which is 11468. Any daily closing above this level will lead to the potential first Target of 11694. After the next targets are 11828 and 11981. These Targets have arrived with the help of Fibonacci levels which you can see on the charts.

At the same time if the Nifty breaks the level of 61.80% then the downside targets are 50% 38.20% , 23.60% and 0%.

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

Nifty has made enough bottom in the Month of September and had a sharp recovery in September. Now the Index has to hold above 61.80% and we can see a good consolidate and recovery. However, it all depends on the National and Global scenario. If we don’t see any news which affects majorly, we can expect Nifty to hold the low and travel towards the north side and we should be seeing a good recovery from here on. If we end up getting some negative news, then we can plan for further downside targets as explained. So far we are getting many positive new barring one or two Stock Specific negative news.

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 Option chain.

Weekly Expiry – 03rd of October

Today 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 11500 and 11600. Hence these level will act as crucial resistance for the first-week expiry. And we have one day holiday in between the expiry and premium decay will be on very high phase. At the same time the support is seen at 11400. So a good swing movement can be expected on the expiry. The overall PCR ratio is showing bearish sentiment. Now we have to see if Index holds 11400 on 1st of October and travell towards 11600 zones. And being Wednesday is being a holiday , we have expect muted movement also to decay the premium. So Overall it is suggested to stay away from Option in the first week of October. Now we should wait and watch as to how Market will react to the different 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. As of now, we could see strong support is getting built up at the zones of 11500 and resistance at the levels of 11500. Looks like 11500 will be a crucial level for the Month of October. Above this will lead to Bullishness and below 11500 will lead to bearishness in the market. we will get more clarify overall once we pass on the first week of Expiry.

Immediate Target and resistance

  • Upside Targets: 11694, 11828 and 11981 (Above 11468).
  • Downside Targets: 11309, 11150, 10954 and 10637 (Below 11468)
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. Huge outflow is still on by FII. We have to wait and watch as when the inflow will start again. The downward journey of Auto Sectors is still a cause for concern. PSU bank yet to show the upside movement. Pharma sector has beaten up badly and we may expect a reversal in this counter soon. Housing Finance Companies are going on a series of news,We should watch as to how the month of October for these companies. So overall we are eyeing at the upside move ahead after a small consolidation.

Conclusion form Stock Phoenix :

We see Index bullish on near term and expecting index to recover from the consolidation move and give some sort of relief to small-cap and Mid Cap. 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. Yet again all the gains were given up end of the month. Almost all the small-cap and mid-caps are fallen massively and still falling nonstop. Once we see a sign of recovery in Index, these also will follow the big boss and we should take advantage of this and start our strong holding on Investment for the next big round of move.

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