Tighten your seat belts, it's going to be an interesting weekly options expiry as Nifty forms NR7+IB
Living up to its expectations, Nifty began the month of December on a buoyant note, which is usually considered to be one of the best months for Nifty. Data indicates that on average, the index has gained about 3.3 per cent with the highest performance delivered in the year 2003. And, interestingly, in only one instance in the last five years, the index has delivered flat to negative returns in the month of December.
During the day, there was a phase wherein, the market participants seemed skeptical about the upmove and some moments of volatility were also witnessed, but seeing European indices in green added further confidence among the investors & traders. As a result, Nifty extended its upmove and settled with gains of 1.08 per cent.
The broader markets too ended the day in green; however, they unperformed the headline indices with Nifty Midcap 100 & Smallcap 100 advancing 1.03 per cent and 0.17 per cent, respectively.
On the daily chart, Nifty has formed a small-bodied bullish candle. Interestingly, on the daily chart, there is a formation of an inside bar as well as an NR7 pattern. It formed an inside bar because the day’s range was within the high & low of the prior trading session and NR7 as the day’s range was the narrowest in the last seven trading sessions.
Considering this formation, the high & low of Wednesday’s bar is going to be very crucial. The level of 17,213 on the upside and 17,064 on the downside should be closely watched as a decisive move could be seen in breach of the above levels mentioned.
Interestingly, the RSI on the daily timeframe is about to witness a crossover as its on the verge of a bullish crossover of the nine-period average.
Overall, the level high and low of Wednesday’s session would be crucial to watch out for on Thursday.