Nifty 15 September Expiry: A ‘Double Top’ in the Making!

  • Stock Market Analysis

The previous expiry had been a calm one as the benchmark Nifty 50 index remained volatile but hovered within a range. There were no big one-sided moves seen in the last week, although the trading range was somewhat big. 

In the current expiry, the Nifty is attempting to cross its previous peak of 17,992.2, marked on 19 August 2022, after which the index fell quite sharply. Although the Bank Nifty has already surpassed its respective peak of the same date, the Nifty is yet to catch up. The underperformance of the Nifty is making it difficult for it to touch the psychological level of 18,000 which is proving to be quite a strong resistance.

Image Description: Daily chart of the Nifty 50 (spot) 

Image Source: Investing.com

Although the range of the previous expiry has been broken on the upside, a delay in breaking the top is only increasing the probability of a reversal from here. The index has reached a high of 17,980.2 in today’s session which is very close to its previous peak. The price action including the previous rally, followed by a correction and then a rally back to near the previous high has created a Double top chart pattern. This is a bearish pattern and indicates a trend reversal to the downside. Although the pattern is not yet complete, the probability has increased as the index is taking some resistance around the same level. 

Now, if the index starts to fall from here, it would further invite bears to step in from these higher levels which could further accelerate the fall. The first early signal of a potential reversal from the current levels would be once the Nifty breaks a low of the previous day. As you can see from the chart, from the last 4 sessions, the index has clearly maintained a distance from the preceding day’s low. Once this pattern distorts, it could signal a fall. 

Another concerning thing is the formation of a potential negative divergence at the top. Even if the Nifty crosses its previous high, which could be a bullish signal but then a negative divergence would form which would act as a contrarian signal. This divergence has already formed in the Bank Nifty index .

Despite today’s green day, the India VIX has not eased. The VIX has risen 1.24%, with the market’s rise which is generally not a common behavior. The India VIX rises when the market falls and vice versa because fear of a fall generally soars the premium on options to a higher extent than greed for a rally. Hence rising VIX is indicating that there is some fear in the market despite today’s rally.

So for the current weekly expiry, 18,000 would be a good resistance but even if it gets breached, a massive upside is not expected. On the other hand, 17,500 is strong support for the week.

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  • Baap Ji @Baap Ji
    abe salo iska statement 12 ka deya huwa hai ye bhi dekh lo ak baar 😁
    Like 1
  • Raju Shinde @Raju Shinde
    very nice
    Like 0
  • Rajesh Sharma @Rajesh Sharma
    dear ayush ,i am also agree with your view .
    Like 3
  • Rajesh Sharma @Rajesh Sharma
    dear ayush ,i am also agree with your view .
    Like 0
  • Ramanathan Jagannathan @Ramanathan Jagannathan
    I tend to broadly concur with your view. BTW what do you mean by negative divergence at the top.
    Like 0
    • xtemp abc @xtemp abc
      Search Google (you seems to be new in share market, it is advised to get some knowledge by reading & understanding regularly)
      Like 0
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  • IMRAN DIVAN @IMRAN DIVAN
    This Current weekly expiry definitely touch 18220 level, if this level sustain on a daily 15 minute time work frame, then we can see 18520 + within next weekly expiry.... buy on dip... TOTTALY BULLISH...
    Like 2
  • Nishi kumar Sharma @Nishi kumar Sharma
    Pl update banknifty/nifty daily levels
    Like 0
  • suchitra anil @suchitra anil
    If Gapup opening please suggest
    Like 0
  • sharad singh @sharad singh
    You can provide any of your other social media accounts where I can follow you.
    Like 0
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      Hi Sharad, u can find me on LinkedIn. Due to some restrictions I can't post the link here.
      Like 2
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  • NAGASEKHARA BABU @NAGASEKHARA BABU
    TQ UPDATE NIFTY DAILY LEVELS
    Like 1
  • Hardeep Singh @Hardeep Singh
    Are u ok Anand
    Like 0
    • Abhisek Agarwalla @Abhisek Agarwalla
      What are your views Sir?
      Like 0
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  • Anand Tripathi @Anand Tripathi
    tomorrow everything will be red..bloodbath in indianmarket
    Like 7
    • Sachin Malhotra @Sachin Malhotra
      yes tomorrow market will be bearish
      Like 0
    • Sachin Malhotra @Sachin Malhotra
      tomorrow market will be bearish
      Like 0
    • Girish Kandhari @Girish Kandhari
      Reasons for your comment is desired by readers!
      Like 0
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  • Naveen Dhingra @Naveen Dhingra
    Bro wait for morning
    Like 1
  • Anand Tripathi @Anand Tripathi
    tomorrow everything will be red..bloodbath in indianmarket
    Like 1
  • Naveen Dhingra @Naveen Dhingra
    Bro wait for morning
    Like 0
  • Anand Tripathi @Anand Tripathi
    kal sab kuch red hoga ..
    Like 0
  • vippen Verma @vippen Verma
    Sir my 17900 put hold is what should I hold exit
    Like 0
    • Tanmay Mukherjee @Tanmay Mukherjee
      tomorrow's day will be in red. if not major then minor you can still exit your position in profit
      Like 1
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  • vippen Verma @vippen Verma
    Sir my 17900 put hold is what should I hold exit
    Like 0
  • vippen Verma @vippen Verma
    Sir my 17900 put hold is what should I hold exit
    Like 0

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