NIFTY analysis for tomorrow 20 May | Monday

18 thg 5

As we discussed, NIFTY has a bullish structure as it was tested on a disaster management system. That is exactly what happened today. The market had a huge volatility of 500 points in 10 min. There was no order flow; it was like a pump-and-dump scam. What is SEBI doing regarding these spikes? Let's see for tomorrow's setup-
If we look at the chart now:
The market is trading at the resistance level right now, as it was a disaster management system testing. There were not many players in the market. So there were no big moments. The important support levels 22293, 22100, on the other hand, 22609(minor resistance), and 22763 are going to provide a nice resistance.

If we look at OI data:
PCR = 1.25 shows a bullish structure. If we notice today after 11:15 AM, there is a heavy volatility with 500 points. However, there was no order flow in the OI data. 22500 is the maximum pain. 22400 and 22300 have good PE writing that is going to provide a nice support. On the upper side, there is less CE writing, which shows that the market is still going in a bullish direction.

FII and DII data are not yet available.
I am expecting the market to go higher in the upcoming sessions.

Reasons:

1. RSI crossing 60 to the upside might be the start of the new bullish trend.
   
2. Price > EMA (13,200), which shows the market is ready to go bullish.
   
3. PCR = 1.25 shows a very bullish sign.
   
4. Price > VWAP means bulls are getting strength.
   
5. The market has already given a breakout. It was a good accumulation today; soon, it will shoot to the upside.
   

Verdict:
Bullish

Plan of action:
Sell 22400 PE (Hedge with 15/- Premium)