Nifty View: Update for 20th Feb 2019

Near Term Trend: ↓ Down 

Market update: Nifty opened cautiously at 10650 10 points up and slowly & steadily made its way to 10720 levels. However the last hour selling frenzy knocked markets down and it again closed in red at 10604 ( down 35 points).

Today even though Nifty protected previous swing long of 10583 by just couple of points, the equivalent level on Sensex was broken so we have a new low on Sensex charts. But keep in mind in order to break the previous swing low market has taken 8 days while the previous rise from 105853 to 11118 had taken 7 days so its clearly a corrective move. So this break of crucial levels has come one day too late.Also this entire fall ( for most part) was devoid of any strong momentum anyways which we have been mentioning in our posts almost everyday.

Overall market trend remains down as we continue to close below previous day low but this is not a market where one can go and short. Today was the 9th day in a row (for sensex) where it has closed in red. Now this is something very very rare (historically max we have seen markets trending in one direction is around 9-10 days). So markets may be in downtrend for now but they are dangerously close to giving a strong bounce (may be just technical or a deadcat but bounce is a bounce). There are lots of traders banking on 10583 support but since market has already taken so much time the relevance of 10583 is no more there. So there could be a likelihood of a false breakout below 10583 and a sharp recovery from there so please keep that in mind.

Like we have been saying if you want to short then wait for a bounce,let it play out and then only short. Markets are never one sided and they cant keep on falling in a straight line. Inspite of a weak close today the advance decline ratio was positive ( though marginally but this shows that actual force is still missing). Even the bank nifty closed in positive.

In nutshell even though Market remains weak, its not indicating a sharp sell from these levels on the contrary a bounce is very much on the cards (which may or may not sustain). If we do see a bounce then we need to see the nature & momentum of bounce before we conclude further. On the downside even if Nifty break 10583 don't be tempted to short it ( agreed it might just keep on falling for entire session but chances of getting trapped on the wrong side are far greater).

Happy Trading to you!!
 

Nifty View: Update for 19th Feb 2019

Near Term Trend: ↓ Down 

Market update: Nifty opened on a positive ground today on the back of positive global cues, however familiar scenario played out yet again and Nifty quickly dropped around 100 points from day high. It closed at 10740 down 85 points.

It was 7th consecutive day fall for Nifty ( 8th for Sensex) and even though Nifty has taken 7 days it still hasn't been able to break below 10583 which was the previous swing low. However that doesn't change anything. Nifty remains in a bear grip and unless it can close above 10900 levels in next 2-3 days, our views will not change.

For short term, since markets are continuously falling, its possible that markets try to make a temp bottom around this area and attempt to make a recovery. How far that recovery can go and for how long it can sustain is something which remains to be seen.

Nifty was continuously making close below previous day low and as a result weakness continued too, but now since last 2 days Nifty has somehow managed a close above previous day low. Today it didn't even make a new day low.

Technically speaking, we are still holding the same view and continue to believe that some more time is possible before Nifty start a new leg on the downside. As mentioned in my short term view (pls ref to below link)
http://niftywaveindia.blogspot.com/2019/02/nifty-update-short-termnear-term-wave.html   

We feel a new corrective  has opened after 'X' wave ( so the overall B leg from the lows of 10K continues for now) and the move we are seeing now is probably the B/C leg of second corrective and larger leg on the down side can begin only when this corrective gets over. As the pattern progresses we will get more clarity on the overall scenario. 

In nutshell, markets remain weak but are oversold so some sharp pull backs in short term can not be ruled out but like I said earlier, its very difficult to comment till where this upmove can stretch (anywhere from 10750-10900 is a possibility).Traders may wait for this upmove to play out and take a short position when it starts fizzling out ( only when it start fizzling out, not before). 

We keep guiding and advising our subscribers through regular intraday whatsapp updates as to what needs to be done during trading hours. If you wish to subscribe to our live whatsapp Nifty calls/trading recommendation then you may subscribe using below link:

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Nifty Cyclical Moves/Time cycle corrections

While its important to look at prices, its also important to look at time cycles. Some times time cycles works better than any other technical phenomenon. Trading or price movement is basically an outcome  of traders behavior, psychology or emotions and its often observed that a particular behavior or emotion can only last upto a certain period or time. Hence at times we keep seeing rallies even when news flow is bad and keep seeing selling pressure when everything is good.

As per our views and observations, we have seen that markets usually follow 3 time cycles for corrections

1.Very rare:.50-60% These are basically stock market routs and are not very common

2.Rare: 25-30% corrections-these are some big corrections and are often seen once in 3-5 years

3.Common : 10-15% Correction- which can be termed as commonly occurring or business as usual and often see almost every other year

No.3 (10-15% correction) is pretty common so we are not going to discuss it but lets see a bit more of no.1 &2.



Nifty

Very rare 50-60%:  These are stock market routs which comes and changes the entire perspective or gamplay. Impact of such corrections are huge and their impression can be felt for years to come. Like we said such corrections are pretty rare and in our Indias context these are seen once every 8-10 years.

• First one was in 1992 ( the Famous Harshad Mehta scam) when stock market had lost more than 50%.
• Second rout came exactly 8 years after in Year in 2000 ( dot com bubble): when sensex fell from 6K levels to less than 3K
• Last rout we saw was way back in 2008 (Housing /Lehman Bros crisis) When there was a deep correction of 60% and Senses plunged from 21K levels to less than 10K & Nifty from ( 6k to sub 3k).

Looking at time cycles one can argue that another stock market rout is already due &  it remains to be seen if it comes and what will be the news/root cause behind it.

Rare 25-30%:Another mid level correction which is often observed is 25-30% these are not very common but still observed after 4-5 years. Since 2008 we have observed this correction twice.

• Once in 2010-11 when Nifty fell from 6k levels to less than 5K
• Second in 2015-16 when Nifty fell from 9k levels to 7k levels.

Looking at these time cycles one can argue even the 25-30% correction is due now in 2019. However keep in mind we have already seen a correction of 15% ( from top of 11750). So it remains to be seen what we are witnessing now remains a normal correction ( 10-15% which is already done) or turns into something bigger ( 25-30% which even current time cycle are projecting) or turns into something even  bigger and catastrophic and just destroys everything.

Just a food for thought!

Nifty View: Update for 18th Feb 2019

Near Term Trend: ↓ Down 

Market update: Nifty opened flat today and crashed to day low of 10620. There were some recovery efforts from oversold zone and Nifty bounced to 10730 ( almost 100 points up from day low) before closing down 20 points at 10724 ( almost flat)

10690-10730 was the last support area we were expecting Nifty to hold on to but even that was broken with a swift action today. At one stage Nifty was even threatening to go below 10583 ( previous swing low) however some late value buying brought some relief. Overall today Nifty witnessed good momentum on the downside and the way crucial support levels were breached today has made it clear that Nifty is in a downtrend only hence inspite of Nifty recovering 100 points from day low and closing flat (above our critical levels), we have changed the near term trend to 'down' now. However that doesn't mean that nifty cannot bounce back. Surely Nifty can still try to make a comeback and rise further 150-200 from these levels but will it be able to sustain it? we doubt that now.

Nifty has been falling in one straight line since last 7 days and fact that the initial fall was devoid of much momentum is also pointing to 1-2 bounces in near future but it remains to be seen how far it can reach and for how long markets can sustain it.

let us take couple of minutes to explain why, inspite of markets falling daily, we were keeping the trend 'up' till now. Last rally that we saw ( from 10583 to 11118) was indeed an impulsive move or a strong thrust and looked like a breakout from trading range market was trapped into for last 2 months. Now as a basic rule no impulsive move should be retraced much below 61.8% ( which was 10787 in this case) now the logic behind this rule is that after a breakout there are will be some traders who are left behind and who couldn't participate in rally so such traders always jumps in after seeing correction and take prices to new highs. Breaking below 61.8% means markets are not seeing buying support which ideally it should have seen. But that still doesn't mean that market is ready for shorting, the thrust or power of previous rally is still very strong and its not possible to negate or overturn it so easily so there are still chances of a meaningful bounce from 75%-80% retracement level ( that bounce may not make a new high but still can go substantially high). But once even that level is breached convincingly (10730-10690 in this case) then there is very little hope of seeing a sustainable recovery. However keep in mind the impact of previous thrust or rally is still pretty strong and is still present, so markets may not go down in immediate term and can still see some bit of bounce and can still see some more time trading around these levels ( just to digest the previous strong thrust) but sooner or later it will give up (unless of course another strong thrust or breakout is witnessed which is pretty rare and usually happens when a pattern has just started developing and not when its about to finish).

Overall from a medium term we were always bearish on markets ( as mentioned in our medium term update) but were expecting this corrective up move to continue for a  bit more especially after seeing the rally from10583 to 11100. Previously we kept on projecting levels of 11k+  when everyone was bearish on markets and wasn't expecting Nifty to cross above 10985. Nifty eventually did cross 10985 and  achieved 11118 but didn't last for long. However now it looks like the overall corrective pattern ("B" leg from 10K low) is about to finish and a new leg ("C") on the downside is about to begin pretty soon. Still that doesn't mean we are recommending shorts, its just that probability of markets going down and touching new lower levels has increased now ( but dont rule out 100-200 points intraday/short term bounce in the immediate term. When we mark trend "UP" that simply means looking out for trading opportunities on the long side similarly 'down' means now we should be focusing on trading opportunities on short side.


We keep guiding and advising our subscribers through regular intraday whatsapp updates as to what needs to be done during trading hours. If you wish to subscribe to our live whatsapp Nifty calls/trading recommendation then you may subscribe using below link:

http://niftywaveindia.blogspot.com/2019/02/join-us-on-whatsapp-how-to-subscribe.html


You may follow us on Twitter: Nifty Trend @Niftytarget

Happy Trading!!

Nifty View: Update for 15th Feb 2019

Near Term Trend: ↑ UP

Market udate: Nifty opened weak and didn't trade in green even for a moment. Towards the mid session it threatened to break below 10700 but didn't and closed down almost 50 points down at  10746 levels.

Overall todays session was again in line with what has been happening since last 5-6 days. Only thing is Nifty didn't see any selling pressure in the last hour ( since last 5 days Nifty has been seeing a sell off after 2.30PM). We had mentioned in our post yesterday that we would like to see if Nifty takes support at 75-80% retracement level which is sitting at 10716-10692. Today market tested the exact 75% retracement level (10718) and managed a small bounce from there. Even though it wasn't much but atleast markets shown some bit of respect to it. So for now we are keeping the status unchanged.

Now we need to see if markets can build on something from here and try to salvage some of the lost pride. Nifty/Sensex have been falling since last 6 days and markets can not be so much one sided sooner or later a corrective bounce will come. Even the sellers looked tired today. We have been saying that even though markets are getting weaker by day they are lacking momentum. Today was no different.

All the negative things we mentioned yesterday about market stays intact even today and one more thing have been added to it. Oscillators and indicators have started turning down & in "sell" mode one by one. Still we believe that probability of markets bouncing from here ( even if its just a technical bounce) is open.We also saw positive divergence today with bank nifty which closed in  +ve territory

Technically no change in our midterm/near term outlook which we posted couple of days back. Nifty remains in a corrective leg ( from lows of 10K) and it seems some more parts to this corrective legs are still pending and Nifty will resume its downtrend only when all parts are complete.

You may ref http://niftywaveindia.blogspot.com/search/label/Nifty%20Specials for the detailed wave count and analysis.

Markets are very close to being in oversold territory so if one is planning a short then keep a tight stop loss as short covering/value buying can bring some relief . Fresh shorts are actually not recommended at these level.

We keep guiding and advising our subscribers through regular intraday whatsapp updates as to what needs to be done during trading hours. If you wish to subscribe to our live whatsapp Nifty calls/trading recommendation then you may subscribe using below link:

http://niftywaveindia.blogspot.com/2019/02/join-us-on-whatsapp-how-to-subscribe.html

Happy Trading to you!!

Nifty View: Update for 14th Feb 2019

Near Term Trend: ↑ UP

Market update: Nifty continued with its weak trend and inspite of a strong overnight rally by US stocks Nifty tanked and closed below 10800 levels.

We had mentioned yesterday that bulls have their back at the wall and one more nudge will probably push Nifty in the bearish zone. Although we did get that nudge today and Nifty even broke below its crucial support of 10800-10820 we still would like to see and observe markets a little more before we conclude that trend has indeed changed down. Reason for not doing so even now is the lack of momentum. We don't have the momentum which ideally we should have seen. Nifty has lots of things going against it, like:-

•  It has returned to the range it broke after 2 month of hardwork (back to below 10900 levels)
• Broke below 61.8% retracement level of the recent rise today ( 10787) though marginally and adjusted closed was just above it
• 4th consecutive day of lower low (closing below previous days low consistently)
• Breaking below previous week low ( 10822)
• Making top ( 11118) on a day of good news and +ve sentiments (rate cut)

Now all these things are definitely pointing in the direction that markets are weak and getting weaker by the day but still there are few things which are suggesting caution against going short at this stage,like-

• Lack of momentum: Momentum is missing for most part and if you analyze hourly chart you will notice that most falls are coming only in last hour
• Positive divergence in RSI ( which still continues on some time scales)
• PCR (1.2) dropping but continues to be in favour of bulls
• Lower VIX: Inspite of markets falling daily VIX is not budging and not moving up

Now we may ignore most things but lack of momentum is something which can not be ignored. When market falls without momentum its usually a sign of corrective fall. Now a corrective fall can extend and move a bit higher/lower than the expected levels but all corrective moves result only in one thing i.e. markets reversing when they are over. Now we are not saying with absolute surety that its a corrective fall, its just that the indications we are getting are suggesting and there is a possibility. Now market can start building momentum from tomorrow onwards and prove its not a corrective fall which can certainly happen but for now we need to see more evidence. There is no harm in waiting on sidelines if one is not sure.

We have seen that market broke below 61.8% retracement level (10787) today but it was not very convincing now we need to watch next critical support level ( 75%-80%) which  stands at 10716-10690. Now this level assumes lot of significance as the entire rally we saw ( 10583-11118) actually started from this level only when Nifty opened with a gapup at 10690 levels on 31st Jan.

So in nutshell, nifty continues to be weak and one should continue to be observant and watchful for some more time and if one must trade then trade with strict stop losses. We need to see if Nifty respect 10700 or even that is taken out in coming days.

Happy Trading!!

Nifty Short Term/Near term: wave count update

Wave count update for Nifty movement from the lows of 10k in Oct'2018

Like I mentioned previously too, entire rise from 10K is looking like a complex corrective which is clearly visible because of so many overlapping waves and on a bigger time frame this rise from 10k to present levels is "B" leg of a new corrective or "E" leg of an extracting triangle. For now lets assume its "B" leg of new corrective ( fall from 10750 to 10K level being the "A" leg as explained in the Nifty medium term outlook).

Now we have been saying that this B leg is developing as "7 legged diametric" pattern ( once this diametric is completed Nifty is likely to open a new leg downwards. However inspite of completing more than 2 months, this diametric is still ongoing. Currently there are 2 possible outcomes. lets discuss each possibility in detail.



Nifty

Option 1: One possibility is that "f" leg got completed at lows of 10700 (in Jan) and after that "g" leg is developing as an irregular corrective pattern. Now theoretically "g" leg can mimic "a" leg ( which measured 600-700 points). So its possible that G leg can touch anywhere from 11200-11400 before starting a new leg down. However if the fall continues and Nifty break below 10580 in next3 days then it would mean "g" leg got over at 11118 ( probability of this happening seems pretty low as of now)

Option 2: Another option is that "g" leg got over at 10987 as failure pattern and what followed after that ( fall from 10987-10583) was an "x" wave post which Nifty has opened another corrective. Now considering various factors this is looking like a more probable and acceptable count. Implications of market opening another corrective are more or less same as option 1 only thing is that in this scenario Nifty probably can spend a bit more time in this corrective move ( B leg can stretch for some more time and can even see slightly higher levels). Rise from 10583 to 11118 levels is looking like a impulsive move ( "A" leg of new corrective) and it even broke the range market has been trading in since last 2 months. Now the fall we are seeing ("B" leg from 11118 to 10820 today) is a mixed bag but it remains to be seen till what level it retraces the entire rise. At todays low of 10820 its still less than 61.8%. If Nifty fall further from here and retraces more than 61.8% ( 10787 levels) then probably this second corrective is developing as a triangle ( probably as ending diagonal) which means Nifty can still touch higher levels (11300-11400). However it may also  starts developing as contracting triangle in which case there will be no high ( 11118 will be top) but even then Nifty might still see 11K+ levels before starting the downtrend. However if 10787 is protected then probably its developing like a simple zig-zag which opens up a possibility of a sharp upmove from current levels.

So doesn't matter which way you see, there is still a possibility for Nifty to move up in near term ( anywhere from 11k to 11400) and someone looking to short ideally should wait for some more time. Current developments in market are not suggesting a "short and hold" scenario and there remains a possibility of nifty moving up sharply and trapping traders on the wrong side or market may just tire out traders by not giving breakout/breakdown ( or by entering into a new trading range) anytime soon.

Ever since Nifty hit 10800 in December, its giving a hard time to traders which is expected during a complex corrective. Whole purpose of a complex correction is to push traders away from markets but as the time is passing by, markets are indicating they are pretty close to finishing this complex corrective and getting into a trending move.