Nifty View: Update for 25th Feb 2019

Near Term Trend: ↓ Down 

Market update: Nifty opened flat , traded flat and closed flat.

Even thought market didn't move much ( infact didn't move at all) but the fact that it held the gains of previous days, continue to point in the direction that probably the down move is done for the time being. However not all is lost for Bears yet. Markets have still closed below the extremely crucial zone of 10800-10850 which should keep the bears morale high going into the weekend.

For bearish trend to resume we need a strong fall below 10700 levels now and on the contrary if bulls manage to push markets a little more from here and sustain it then probably we can see this upmove stretching a bit more from here.

What is heartening  to see is the consistent positive breadth of the markets. 3rd day running the advance decline ratio was positive (34:16). Participation across the board has been good which is something missing from the markets for quite a while. However it will take just 1 bad day to put things back where they started from.

So for now we will keep the trend as 'Down' only but we are probably one just one more nudge away from changing it to "UP" but no point in anticipating it and we will believe it when we see it. For now refrain from taking positions at current prices and like we have been saying, let markets show signs of weakness ( if you want to create shorts) which are still not visible or wait for 10800-850 to be taken out if you want to go long. Current level is basically a no-mans land and such flat trading today indicates only one thing. Markets are creating a base/pad to launch its next move.

Technically we continue to be inside this complex corrective however like we said in previous post, there are plenty of indications which are telling that not much time remaining for it to be over.

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 View: Update for 22nd Feb 2019

Near Term Trend: ↓ Down 

Market update: Nifty opened cautiously almost at par and kept rising steadily up. It even crossed 10800 levels momentarily and then dipped slightly but again recovered and closed at 10790 levels (up 60 points).

Today was the second consecutive day where Nifty closed above its a previous day high and not only the previous day, market even closed above the high of last 3 days. Last 3 days fall has been retraced in 75% of time which is very fast indeed & is a strong bullish indications. However it still can not be concluded that Nifty has started a new leg on the upside But yes chances have increased that markets can open a new leg on the upside ( but we still need to know for sure).

Nifty has crucial resistance and very critical resistance sitting at 10790-10830 range and today markets closed bang at this critical level. 10790-10830 ( give or take 20-25 points) is a every key pivot point and will probably decide the near term trend for the markets. If markets can overcome and sustain these levels then chances of markets moving up and testing 11K+ levels will increase further.

We mentioned yesterday that the current pull back can continue till 10800 at least, that was the logical target of this pullback, and if its indeed a pullback then we should see a sharp reversal from this zone and on the other hand continuous up move above these levels might indicate that bottom is done for near term. Advance decline ratio continue to be positive at 36:14 for second day in a row.

We had also mentioned that even though near term remains down, it is not a market to create fresh shorts and one should wait for pullback to come first and short only when the pullback start fizzling out. Till today there is no sign that this pull pack is losing any steam and markets are rock steady but of course things can change tomorrow and we see weakness tomorrow then it might indicate that the down trend is continuing in the market for now.

In summary, watch the next couple of trading session carefully, weakness from here will indicate that markets are probably going to test lower levels again  and further strength will probably indicate that bottom is done for time being ( in which case it will be a double bottom at 10585). So one may plan his trading strategies keeping these things in mind.

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 View: Update for 21st Feb 2019

Near Term Trend: ↓ Down 

Market update: Nifty opened strong at 10650 levels today and kept trading between 650-700 levels before short covering propelled it to 10750 levels in last hour and it closed at 10635 up 130 points.

We had mentioned yesterday that Markets are continuously falling since last 8-9 days and it has come dangerously close to giving a strong bounce and today we saw that. There was no rocket science technical analysis involved there and any one could have made out that markets are oversold and one sharp bounce can come anytime. So no surprises here.

Now that we have seen the expected bounce, what next? the real test begins now for the market. It will be interesting to see if markets have it in them to continue the momentum going forward. What is heartening to see is the broad based rally we got to see today. Advance : Decline ratio stood at 44:6 today and we are not sure after how many days market have seen such a good participation across board. Volumes were good too today (higher than last 2 days). As per our analysis market has strong resistance at 10800-10850 zone and this rally may continue till 10800 atleast. But keep in mind if its driven by short covering then it wont last long and soon the downtrend will begin.

For now we will keep the trend as 'down' only. Like we usually say, one day rally in a downtrend doesn't mean anything and doesn't change much. However if markets keep building on strength from here and keep exhibiting strength even over 10850-10900 levels then once again it can touch higher levels ( 11k+).

We mentioned yesterday that even though the trend remains down its not a right market to create shorts. One should wait for the bounce to come and create shorts only when it start fizzling out. Now that the bounce has come one should watch it for some more time and once it starts weakening or fizzling out then only create shorts. But keep in mind if it start spending too much time over 10800 levels then probably its getting ready to test higher levels ( in which case only longs are recommended).

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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Happy Trading!


 

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!!