Nifty View: Update for 17th Dec 2018 (Monday)

Market Update: Flattish close today. Markets traded between high and low of yesterdays and didn't make any move at all and closed almost flat. You may call it consolidation you mall call it resilience or my you call it markets inability to climb new high it doesn't matter. Nifty just didn't give any clue about its intentions today but having said this I feel the time is running out for Nifty to climb to new highs. Its been almost 2-3 weeks and we are still stuck at 10700-800 levels. Next 2-3 days are going to be extremely critical  and Nifty's move will probably give us indication about which way it wants to go.

The previous move from 10965 to 10350 (6day)  and then shap rally from 10350 to 10850(3-4 days and counting) is just a volatile move by markets to get rid of weak hands. Right now Nifty looks strong but the downside gates have not been closed yet. There is a strong probability of testing 10350 again but there is no confirmation right now. On the upside we need Nifty to cross above 10965 in next 2 days. till now Nifty has retraced about 80% of fall (from 10965 to 103450) in about 65% of time so the move up does look faster. If nifty can cross 10965 levels then we are probably heading back to 11100-11200 or higher levels

Broad picture- If you look at overall picture then the entire fall from 11750 to 10K levels took about 40 days. From the lows of 10K so far nifty has consumed about 33 days and retraced about 55% of total fall ( in about 80% time) which is very very slow. So overall we remain in correction mode. There was a good chance about 2 weeks back (when Nifty broke above 10600-10750) of markets scaling back to 11500 levels ( that's when we had gone long too)  however with each passing day the chances look dim now. New moves always come faster ( called impulse) slow moves are corrective moves and they last till they last and after they are over the main trend resumes. So don't think that current move from 10K levels is a bullish move (unless we cross 11750 in next 7 days which is next to impossible).So if 10965 gets crossed in next 2 days then we can expect this corrective move to last a little bit longer and nifty might see higher levels of 11100 or 11200 like I mentioned above else the lower levels might be retested pretty soon.

I personally feel markets are more or less done with the 'cleaning act' and has removed weak hands already ( both long and short side) surely it can spend few more days in this range and keep us guessing but it should make a move pretty soon now.

Near Term Trend:  ↔️ (Sideways)

Trading recommendation: No position, same as yesterday. Don't recommend going long/short yet.



 

Nifty View: Update for 14th Dec 2018

Market Update: Nifty opened strongly at 10800 levels and registered a high of 10840 but couldn't sustain the momentum and dropped to 10750 levels before closing the day at 10790 levels. Nifty today made a Doji candle. Doji candle signifies indecisiveness where open and close rate are similar and market makes a big low and high shadow (and real body is small).

10750 was a good resistance level which was crossed today and Nifty traded above this level though out the day. This definitely count as a positive but Nifty is not out of woods yet. Even after rallying up almost 450 points we still need confirmation that bull trend has resumed. Nifty took 6 days to fall at 10350 from 10965 levels and after 3 days it has retraced almost 75% of the fall. We need Nifty to reclaim 10965 in next two days to signal a start of a fresh upmove. Nifty has given one confirmation today by crossing 10750 successfully today however secondary confirmation would be to make a new high above 10840 tomorrow and finally crossing 10965 levels (in 5 days).

What is worrying me is that entire rise from Oct low of  10k levels has already consumed too much time. Right now we are in 7th week ( from Oct low) and still below 61.8% (fall from 11750 to 10K) of total retracement. If this was a bullish move we should ideally have been sitting at 11K levels by now. Slower retracements are usually sign of corrective moves.

Even though market is making big moves, its indecisive ( we are still at same levels we were 10-12 days back). Need to give few more days to Nifty to settle down before we take trading call. Global markets can play a crucial role going forward. Dow and S&P have already touched their respective Oct lows and even though the correlation between S&P and Nifty is not working presently there is always a risk of catching up.

Trading recommendations: Still no open position, there was a whiff of a trading opportunity around 3pm ( updated here) but it didn't materialize. No point in doing any sort of trade just yet. Sit patiently.




 

Nifty Trade Update - 13th Dec

Update 2.45 PM:  Nifty trading at 10760 levels. We might enter into a trading position around 3.15 so be prepared

Update 3.15PM: No trade. Opportunity didn't materialize.

Nifty View: Update for 13th Dec 2018

Market Update: Big day today for Nifty, it traded strong through out the day (aided with short covering) and closed around 10740 levels ( up 190 points). So what can we expect going forward after last 5-7 days of wild swings and gap down/gap ups? For starters let me make it clear that  these wild swings are just a way or method by which market get rid of 'weak hands' or 'speculators' or 'undecided traders' who simply trade basis their gut feeling or the news flow. Usually such moves are seen just before when markets are about to give a trending move in either direction ( A cleaning act is required before such a move can take place). 
Trend going forward remains indecisive, the bullish scenario I was holding for Nifty was changed when it broke below 10650 but even then I was not bearish and still even after a rally of almost 400 points in last two days I have not turned bullish. Market made one important high today ( 10750). This entire range of 10650-10750 is extremely critical, if nifty can consistently trade above 10750 (todays high) then we can expect the rally to continue and I might turn bullish again. However if this not broken then we can expect a retesting of 10300 levels ( even 10K below that) pretty soon. So sit tight market is going to move big but to ride that movement you need to be patient.

As a smart trader one should not try to trade these wild moves its almost impossible to trade Nifty when you have 100-150 points in either direction so its always better to sit out and wait for market to remove the froth ( shaking up is required to generate and remove froth). Like I said in my previous posts too, the broader trend will remain in one direction these swings will come and go. One should not give too much importance to them and definitely shouldn't try to trade them.

I have not been able to post my wave counts yet ( as it needs some more validation) but will do so real soon. 

Trading recommendations: No open position and I don't recommend getting into one just yet. Movement we are seeing could be due to unwinding and short covering by speculators. But we should be getting a trading opportunity pretty soon ( whenever there is one, will try to update the same live here).

Nifty View: Update for 12th Dec 2018

Market Update: Nifty opened with a huge gap but recovered smartly to end the day up around 70 points at 10549  even though the news flow was all negative. Today was a classic example of age old rule of  "buy on rumor and sell on news" (or vice versa). Nifty saw a recovery of more than 200 points from day low once the 'rumor' of BJP losing became 'news'.

It was a 4th consecutive gap down in last 6 days and eventually turned to be the "exhaustion gap" I spoke about in my previous post. I had mentioned yesterday that index usually turns after posting 2-3 gaps down and the next gap down could turn out to be an exhaustion gap meaning it gets retraced fully ( below is the excerpt of my post) and this is exactly what we witnessed today.

To understand it much better please see the below chart ( hourly chart). We had 3 gap downs in a row which Nifty was unable to recover from but today it was 4th gap down and nifty recovered it on same day itself. Idea here is not to boast but to educate readers about few basic technical parameters. One should not get carried away when gap downs/ups are taking place consecutively. It can be a good trading opportunity if you are able to identify the pattern

 

 

 

 

 

Now when the election results out ( which are more or less as per mkt expectations), Nifty is happy to put the event behind and move on from here. Todays rally is basically a sigh of relief from Nifty. Market is range bound for now and hopefully in a few days the real trend should emerge. For now I am neither in Bull camp nor in Bear camp. Market is choppy and entering into a trading position at this stage will require a big stop loss so recommend waiting for few more days. As a trader we do not have to trade daily but keep observing markets all the time and as soon as the risk reward ratio is in your favor you should jump in.  Lot of short position were entered today in the first half and then we had some short covering+profit booking by speculators  which might continue  for next few more days.

 

 

Trading recommendation/Trade update: No open position right now and I don't recommend going long/short at this stage. Market is being choppy and the big swings might  cause you to get trapped or thrown out in no time. Happy Trading to you.

 

 

 

Nifty View: Update for 11th Dec 2018

Market Update: Nifty had another bad day and crashed below 10500 levels and ended up closing almost 200 points down. Todays fall was significant as it broke below the previous low of 10490 however it took Nifty 5 days to do that ( the previous rally from 10490 to 10950 had taken 5 days too). If you remember I had mentioned in my previous post that Nifty needs to break below 10500 in 4 days to signal a start of fresh downmove however Nifty refused to go down on Friday and gave a huge gapdown today. Break below 10490 in 5 days ( equal time) is counted as a negative too however the negative/downside impact of the same may or may not be that severe. Further on the hourly charts, the fall looks slow.

Thursday market was oversold on short term charts and  I had said further fall from here looks difficult. And on Friday (inspite of a 100 point rally), I had mentioned that downside risk has increased recently and Nifty might slide down below 10600 again. Bullish scenario has changed now and I am not in a hurry to long anytime soon. Please note that momentum on the downside is increasing and even after a 200 point fall nifty is not oversold today.

Technically speaking this is the 3rd consecutive gap down we have seen in last 5 days which is unique and usually after 2-3 such  gapdowns Index turns and the next gapdown becomes what you call an  "exhaustion gap". Meaning if we see another gap down then its likely to get retraced fully. We still have some +ve divergence on hourly charts with RSI and couple more indicators are still in positive zone but its definitely not in buy mode and don't recommend buying at this stage. There are contradictory signals in Nifty present so waiting it out for few days is the best strategy. Presently the election/exit poll result is ruling the market sentiments and this could cause few more wild swings in near term. Further weakness from these levels would suggest that Nifty is likely retest 10K levels however it might just give a sharp pull back once again before it decides to do so. I was bullish at 10600 and even when Nifty was at 10900 but have been proven wrong (but no significant loss suffered in trading as our entry point was low) and things changed once market broke below 10650 levels. Now we need to observe how market is behaving in next 2-3 trading sessions before taking our next trading call. As of now risk reward ratio is not in favour of trading (buy side as well as sell side).

Trading Recommendations: Our last trade ( buy at 10650 was exited at 10630) was closed on Thursday and like I mentioned above, we need to observe how market is behaving in next 2-3 days before taking next trading call. For now I don't recommend going long or short at this stage as the wild swings in market can throw you out in no time.







 

Nifty View: Update for 10th Dec 2018

Market Update: Nifty saw a sharp upmove today and closed around 90 points up around 10690 levels. I had mentioned yesterday that even though the Nifty is down its definitely not out. Bears may have been able to pull the markets down in last 2-3 days but overall the market remained in the bullish trend. Nifty was oversold yesterday and even the RSI gave a positive divergence so there was not much scope for Nifty to move down in short term. Bears had to take Nifty down below 10500 today to signal a fresh downmove but it was always a difficult task

Having said that now the question is whether Nifty is out of woods? We cant say that with surety yet. Todays bounce back was more on technical parameters. it was a bounce back from oversold territory. If nifty can build on the gains tomorrow and cross 10750-10800 levels then probably yes we can say that  Nifty has resumed its upmove but till that time there is always a risk of testing 10600 levels again. especially since the election results are round the corner and Nifty can be volatile for next 1-2 days. I am hopeful that soon the real trend will emerge and we should be able to take a trading call. For now the fall from 10930 levels to 10600 does look like a corrective fall (inspite of a vicious 174 points fall yesterday). I still believe Nifty is in bullish phase and unless proven otherwise I will continue to believe so. That's what I mentioned yesterday ( todays rally is a testimony to that) and even today I will stick to that. Reason we are not taking a trading call right now or we exited from our longs is that risk on the downside has increased a little bit. There is always a risk when you take a trading call in market but once the risk reward ratio is not in your favour then you should always sit out and that's how you respect markets.

As per my wave count the move from 10930 to 10600 its still a corrective move which means a move on the upside is pending. But probably the corrective move is not yet finished so we can see another leg down. On the other hand if the rally continues that would mean corrective move is over and the fall yesterday was a bear trap ( will publish charts soon).

Lots of my friends and followers are asking me why I am not  bearish even though Dow is falling 800 points daily and when election results ( which BJP is expected to lose) are around the corner. My answer is simple, Nifty will do what it wants to do irrespective of what Dow or election result does. For short term we might see some swings here n there but overall the tone of market will remain same and as a swing trader we have to stay with broader trend. Short term swing of 100-150 points should not bother us.

Trading recommendation: We have no position right now and waiting for next trading call. I do not recommend any long or short at current levels. Markets could turn volatile and you may find yourself on the wrong side in no time. Overall trend remains bullish just wait for risk reward ratio to be in your favour before you act even if it means entering a bit late and losing 100-150 points . Enjoy your weekend.