Nifty Outlook & Know about Powerful Oscillator – Relative Strength Index
30th July, 2018 Relative Strength Index – Oscillator A Powerful Technical Tool • An oscillator is a technical analysis tool. An technical analyst bands an oscillator between two extreme values and then builds a trend indicator with the results. The analysts then use the trend indicator to discover short-term overbought or oversold conditions.
• RSI- The relative strength index (RSI) is a technical indicator used in the analysis of financial markets. It is intended to chart the current and historical strength or weakness of a stock or market based on the closing prices of a recent trading period. The indicator should not be confused with its relative strength, that is compared with other stocks, market indices, sectoral indices, etc. Computation
• Focusing merely on trend of stocks or indices, RSI focuses on average gains and average losses for a specified time period. (Default parameters 14 days). To make sure that the RSI always moves between 0 and 100, the indicator is normalized later by using the formula given below • RSI: 100-[100/ (1+RS)] RS: AVG UPS/AVG DOWNS AVG UPS: TOTAL GAINS IN LAST 14 DAYS/14 AVG DOWNS: TOTAL LOSSES IN LAST 14 DAYS/14
• It helps especially at the top of the rally or at the bottom of the fall.
• At the Top or Bottom, trend gives more weightage to sentiments than internal strength or weakness. 6899.85
Overbought- Reading of RSI above the level of 70 means over bought or strong grip of Bulls. BAJAJFINSV [N16675] 6899.85, -0.39% 4690.04 Price Lnr IRIS 07/08/17 Mon D 0 5775 Op 5310.80 Hi 5495.00 5700 Lo 5310.80 5625 Cl 5433.05
5550 • Reading of RSI above 70 means over bought or strong5500 grip of Bulls. 5475 5400
5325
5250
5175
5100 5100 5025 4950
4875
4800
4725
4650
4575
4500
4425 4400 4350 4275
4200
4125
4050
Source : www.SpiderSoftwareIndia.Com 3975 RSI(14,E,9) Rs 85.61 80.00 Rs 80.89
above 70 70.00
60.00
50.00
40.00 17:J 12 19 J 10 17 24 31 A 7 14 21 28 S 4 11 Dly Source - Spider Software Pvt LTD Oversold- Reading of RSI below the level of 30 means oversold or strong grip of bears.
PNB [N10666] 85.90, 4.76% 135.91 Price Lnr IRIS 19/02/18 Mon 195 Op 122.00 Hi 123.50 190 Lo 113.55 Cl 116.50 • Rea. 185 180
175
170
165
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155
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145
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140 135
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110 95 105 100
95.00 Source : www.SpiderSoftwareIndia.Com 91 RSI(14,E,9) 85.90 Rs 22.54 60.00 Rs 32.58
50.00
40.00 Below 30 30.00 20.00 17:N D 4 11 18 18:J 8 15 22 29 F 5 12 19 26 M 5 12 19 26 A 9 Dly
Source - Spider Software Pvt LTD Strong stocks hardly fall below the level of 35
BAJFINANCE [N317] 2685.05, -1.06% 1344.93 Price Lnr IRIS 07/11/17 Tue D 0 B 1:1 D 0 D 0 Op 1848.00 S 10:2 27002685.05 Hi 1848.00 Lo 1773.30 2600 Cl 1802.55 2500
2400
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Source : www.SpiderSoftwareIndia.Com 800 RSI(14,E,9) 90.00 Rs 45.10 Rs 46.15 30 AND 35 - ABOVE OVERSOLD TERRITORY 82.50 75.00
67.50
60.00
52.50
DEC 2016 45.00
37.50
30.00
22.50
16:J A S O N D 17:J F M A M J J A S O N D 18:J F M A M J J Dly
Source - Spider Software Pvt LTD 6 Weak stocks rarely crosses the level of 65-70.
AXISBANK [N5900] 557.20, 0.71% 488.15 Price Lnr IRIS 21/04/17 Fri D 0 D 0 Op 492.00 Hi 497.00 Lo 483.30 620 Cl 486.25
600
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560 557.20
540
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Source : www.SpiderSoftwareIndia.Com RSI(14,E,9) Rs 39.82 78.00 Rs 47.03 OVERBOUGHT TERRITORY 65-70 72.00 66.00
JAN 2017 60.00
54.00
48.00
42.00
36.00
30.00
16:A M J J A S O N D 17:J F M A M J J A S O N D Dly
Source - Spider Software Pvt LTD 7 Divergence- Divergent reading of oscillator relative to Price. • RSI efficiently helps to know whether the trend is shifting or not. • Positive Divergence: When RSI forms Higher bottom after hitting or breaking the level of 30. It gives bullish indication. • But combine with following studies to act on Positive Divergence. Reversal formation on price (Candlestick chart) And A break of trend line resistance
8 4466403
Positive Divergence. 210.60 HINDALCO [N1363] 210.60, -1.31% 0.00 Price 198.90Lnr IRIS 27/01/17 Fri Op 173.00 0 195 Hi 195.00 188 Lo 172.25 Cl 190.75 180
173
165
1 158
150
143
135
128
120
113
105
97.50
90.00
82.50 8 75.00
67.50 1 2 Source : www.SpiderSoftwareIndia.Com 2 60.00 RSI(14,E,9) 78.00 Rs 65.94 Rs 60.95 72.00
66.00
60.00
54.00
48.00
42.00 1 2 36.00
30.00
24.00 15 13:ND 14:J F M A M J J A S O N D 15:J F M A M J J A S O N D 16:J F M A M J J A S O N D 17:J Wkl
9 Source - Spider Software Pvt LTD 1016.90
Positive Divergence.
GRASIM [N1232] 1016.90, -0.83% 0.00 Price Lnr IRIS 22/03/16 Tue 620 7 Op 612.00 Hi 617.99 615 Lo 611.15 610 Cl 613.53
605
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Source : www.SpiderSoftwareIndia.Com 530 RSI(14,E,9) 70.00 Rs 71.07 Rs 63.98 65.00
60.00
55.00
50.00
45.00
40.00
35.00
30.00
25.00 15:SO N D 16:J F M Dly
Source - Spider Software Pvt LTD 10 11287.45
Positive Divergence.
NSE NIFTY [N59901]11287.45, 0.08% Price Lnr IRIS
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35 8580
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Source : www.SpiderSoftwareIndia.Com 7920 27 RSI(14,E,9)
72.00
66.00
60.00
54.00
48.00
42.00
36.00
30.00
24.00 16:A S O N 26 D 17:J F Dly
Source - Spider Software Pvt LTD 11 Divergence- Divergent reading of oscillator relative to Price. • RSI efficiently helps to know whether the trend is shifting or not. • Negative Divergence: When RSI forms Lower top after hitting or crossing the level of 70. It gives bullish indication • But combine with following studies to act on Negative divergence. Reversal formation on price (Candlestick chart) And A break of trend line support
12 11287.65
Negative Divergence.
NSE NIFTY [N59901]11287.65, 0.08% 0.00 Price Lnr IRIS 05/04/11 Tue Op 5923.85 6300 Hi 5928.65 Lo 5855.85 6240 Cl 5910.05 29 2 6180
6120
6060 1 6000 5940
5880
5820
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5640
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5340 34 5280
5220 Source : www.SpiderSoftwareIndia.Com RSI(14,E,9) Rs 71.09 28 1 78.00 Rs 64.82 2 72.00 66.00
60.00
54.00
48.00
42.00
36.00
30.00
10:J J A S O N D 11:J F M A Dly
Source - Spider Software Pvt LTD 13 Negative Divergence.
RAIN_T [N15337] 196.00, -2.39% Price Lnr IRIS D 0 460
440
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6 400 380
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200196.00 180 8 160
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Source : www.SpiderSoftwareIndia.Com 100 RSI(14,E,9) 4 84.00
78.00
72.00
66.00
60.00
54.00
48.00
42.00
36.00
17:A M J J A S O N D 18:J F M A Dly
Source - Spider Software Pvt LTD 14 Nifty outlook – Possibility of Symmetrical Triangle
NSE NIFTY [N59901]11285.50, 5.33% 0.00 Price Lnr IRIS 30/07/18 Mon 11285.50Op 10732.35 11200 Hi 11309.35 14 Lo 10604.65 11000 Cl 11285.50 10800
11171 - 9951 = 1220 + 10600 10600
10400
TARGET 11820 10200
10000 36 9800
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8600
8400
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7800
7600
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Source : www.SpiderSoftwareIndia.Com 12 6000 14:FM A M J J A S O N D 15:J M A M J J A S O N D 16:J M A M J J A S O N D 17:J M A M J J A S O N D 18:J M A M J J Mon
Source - Spider Software Pvt LTD Question & Answer Queries should be specific to stock that are in FNO segment. 17 By referring to any particular sector, Kotak Securities Limited does not provide any promise or assurance of favourable view for a particular industry or sector or business group in any manner. The investor is requested to take into consideration all the risk factors including their financial condition, suitability to risk return profile and take professional advice before investing. Such representations are not indicative of future results.
18 Thank You
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